Wine Australia Annual Report 2018–19

Contents

1 Letter to the Minister Year in review 2 Highlights 2018–19 6 Chair’s report 10 CEO’s report 16 Our role 17 Performance statement 21 Strategic priorities 22 Targets and outcomes 2018–19 30 Investment allocation 34 Export and Regional Wine Support Package Activities and achievements 40 Priority 1: Increasing demand and premium paid for all Australian wine 50 Priority 2: Increasing competitiveness 64 Priorities 1 & 2: Extension and adoption 65 Supporting functions The organisation 70 Organisational structure and statement on governance 70 The Board 79 Board Committees 81 Geographical Indication Committee 81 Legislative Review Committee 82 Management and staff 85 Other reporting requirements Financial statements 90 Statements by Chair and Chief Financial Officer 92 Independent auditor’s report 94 Statement of comprehensive income 95 Statement of financial position 96 Statement of changes in equity 97 Cash flow statement 98 Notes to and forming part of the financial statements 100 Financial performance 107 Financial position 114 Funding 115 People and relationships 119 Managing uncertainties 123 Other information Appendices 128 Appendix I: RD&E funded projects 138 Appendix II: Provider and management codes 140 Appendix III: Glossary of acronyms and terms 142 Appendix IV: Compliance index 145 Appendix V: Alphabetical index

24 September 2019

Senator the Hon. Bridget McKenzie Minister for Agriculture Parliament House CANBERRA ACT 2600

Dear Minister McKenzie

On behalf of the Directors of Wine Australia, I have the pleasure of submitting the Annual Report 2018–19 for the year ended 30 June 2019.

This Annual Report has been prepared in accordance with the Wine Australia Act 2013, section 46 of the Public Governance, Performance and Accountability Act 2013, the Funding Agreement 2015–19 and relevant orders.

Our activities and achievements are reported against our Strategic Plan 2015–2020, the Annual Operational Plan 2018–19 and Portfolio Budget Statements 2018–19.

We have also reported on activities associated with the Australian Government’s $50 million Export and Regional Wine Support Package as they formed a substantial portion of our activities during 2018–19. An Annual Progress report has previously been submitted as required under the Grant’s guidelines.

Yours sincerely,

Brian Walsh Chair Wine Australia

Wine Australia ABN 89 636 749 924 t +61 8 8228 2000 Industry House – National Wine Centre, Cnr Hackney and Botanic Roads, Adelaide SA 5000. f +61 8 8228 2066 PO Box 2733, Kent Town SA 5071, Australia. e [email protected] @Wine_Australia WineAustralia WineAustralia www.wineaustralia.com

1 Highlights 2018–19

Positive trends

4%

Australian wine exports grew to $2.86 billion.

Exports to China 15% (including Hong Kong and Macau) rose There were a record 2729 active exporters. 7 per cent to a record $1.2 billion.

Chinese wine drinkers’ 10% perception of the quality of Australian wine The average value per litre exported increased improved from 8.32 out to $3.58, the highest level since 2009. of 10 in 2018 to 8.56, according to a Wine Intelligence study commissioned by Wine Australia.

The 2019 average grape purchase price was $664 per tonne, up by 9 per cent on the price of $565 per tonne for vintage 2017. This In the USA, the perception figure is the highest since 2008. score for Australian wine rose from 7.24 out of 10 The 2019 winegrape crush before participating in of 1.73 million tonnes was a tasting event or visit 3 per cent lower than 2018, but to 8.95, an increase of close to the long-term average 24 per cent. of 1.75 million tonnes.

2 Wine Australia events

Wine Australia hosted 120 marketing campaigns in key markets in 2018–19.

Australia Decanted, US

‘What Wine Australia did this week (at Australia Decanted) is something I never thought possible… you showed Australian wine as most of us knew it to be – without question one of the greatest wine-producing countries on earth. What you gave us, that was unprecedented, was access. Access to the icons of Australian wine. Access to our peers. Access to the unobtainable. When you asked me to put it on my calendar, you sold it as the greatest event Wine Australia has ever put on. You undersold it. Period. I am honoured and humbled to have been invited. I felt this week more like I was in Australia than when I was in Australia.’ Past president of the Court of Master Sommeliers Andrew McNamara MS

Prowine China

‘...the undeniable star of the show was the large Australian pavilion which occupied an entire end of one of the halls … The combination of the China–Australia Free Trade Agreement and Australia’s new AU$50m (US$35.8m) Export and Regional Wine Support Package had already helped lift exports to China by almost 25% over the previous year to more than A$1bn. The buzz surrounding tastings at ProWine of “next wave” Shiraz from Victoria, Margaret River Cabernet Sauvignon, and McLaren Vale alternative varieties, offered little sign of that growth slowing...’ Robert Joseph, Meininger’s Wine Business International

At our events

of surveyed exhibitors 93% were satisfied.

of attendees 96% were satisfied.

After attending events, participant’s perceptions of Australian wine rated, on average, 8.90 out of 10, an increase of 12 per cent on their perceptions before the event.

3 Export assistance

When we surveyed our stakeholders:

of users are satisfied with the 92% level of services provided by our Export Assistance Team.

of respondents agree or of respondents find the Wine 83% somewhat agree that they 83% Export Approval System (WEA) learned something helpful easy to use. about their regulatory obligations during the Wine Australia inspections of their of respondents find it very easy winemaking records. 91% or somewhat easy to find the information they need for export. of respondents agree that 78% they were likely to contact the Wine Australia auditing of those who use the Export team if they needed 88% Market Guides find them very regulatory assistance in helpful or somewhat useful. the future.

Information

We engaged stakeholders through: 85 RD&E News subscriptions increased e-newsletters by 34 per cent to 3673 subscribers. The Exporter Newsletter subscriptions grew by 29 per cent to 7724. Subscriptions to the weekly Market 57 Bulletin rose by 37 per cent to 3264. media releases

Subscriptions to Our monitoring Wine Australia measured 4986 articles news increased about Wine Australia Subscribe by 51 per cent in print, broadcast and Subscribe to 4454. online media.

4 Developing people

15 individuals from across the grape and wine community were selected from over 85 applications to participate in Future We supported 7 new PhD scholarships Leaders 2019. and 10 outgoing travel bursaries.

Regulatory

We conducted 191 site inspections to ensure the truth and reputation for truthfulness of Australian wine.

We analysed more than 200 Australian wines to monitor compliance with the Australia New Zealand Food Standards Code.

RD&E

We managed 183 projects New projects are investigating Wine Australia funding during 2018–19, with 32 under-vine cover crops to supported the AWRI to completed during the period. reduce the need for herbicide deliver workshops and sprays, enhance soil moisture seminars. Five early-career researchers retention and nutrient cycling, were supported to undertake and to maintain, or enhance, Survey feedback found co-funded regionally focused grape yields. We’re evaluating 85 per cent of survey research projects. sensor technology to measure respondents indicated vine canopy temperature in that information provided An independent analysis real time as a potential tool at workshops was useful. of Wine Australia-funded to improve irrigation and new research across 6 projects work is underway to evaluate showed an aggregated selected rootstock genotypes benefit–cost ratio of 1.6 to 5.3 that perform well under reduced on the selected projects. irrigation conditions.

5 Chair’s report

The 2018–19 year was the fourth in our current five-year Strategic Plan and it is clear the sector is enjoying solid growth.

Wine Australia’s funders – our grapegrowing, winemaking and wine exporting businesses and the Australian government – provide the collective investment to improve the long-term profitability and sustainability of the sector and we have seen steady improvement in a range of key indicators over the past year.

The Australian grape and wine community is an integral part of regional communities across the country. Through grapegrowing, winemaking and wine-related tourism, the sector supports 163,790 direct and indirect full- and part-time jobs in 65 wine regions1 and is a significant Chair Brian Walsh contributor to the Australian economy. In 2019, grapegrowing, winemaking and wine-related tourism were estimated to contribute $45.5 billion to the economy.

Export success continues to be critical for the sector’s future growth with more than 60 per cent of the wine produced being exported, making wine Australia’s fifth-largest agricultural export2 – and the only one that is fully value added before it leaves our shores.

In the past year, we have closed in on the goals of our five-year plan: • exports were worth $2.86 billion in the year ended June 2019, having increased by 51 per cent from $1.9 billion in 2015. • exports to China (including Hong and Macau) were worth $1.2 billion in the year ended June 2019, having increased by 306 per cent from $392 million in 2015. • at June 2019, the average price for exports was $3.85 per litre free on board (FOB), having increased by 48 per cent from $2.61 in 2015. • the national average winegrape purchase price was $664 per tonne for vintage 2019, having increased 43 per cent from $463/tonne in vintage 2015.

Export and Regional Wine Support Package

The third year of the Australian Government’s $50m Export and Regional Wine Support Package ($50M Package) has seen bold initiatives to engage with the trade and consumers in China and the United States of America (USA) to challenge their perceptions and increase demand for Australia’s outstanding wine offer. In China, there was a strong Australian presence at key events including the Hong Kong Wine and Dine Festival, Prowein China and the China National Food, Wine and Spirits Fair, as well as the Wine Australia four-city China Roadshow and the China Wine Awards.

1. Ag Econ Plus, Economic contribution of the Australian wine sector 2019, 19 August 2019, p ii. 2. op cit, p i

6 Australian Wine Discovered at Australia Trade Tasting 2019, London The $50m Package has also allowed us to develop an award-winning, revolutionary educational platform, Australian Wine Discovered (AWD). Launched in London in January 2019, AWD is a comprehensive, free education program providing information, tools and resources to discover and share Australian wine. AWD has 25 modules available in English and 9 in Mandarin. Positive feedback from educators, wholesalers, retailers and restauranteurs culminated in AWD winning the Best Trade Campaign Award at the Drinks Business Awards in London.

Another enduring benefit is the global Market Explorer tool that allows exporters and those interested in exporting to explore potential markets and gain a better understanding of opportunities in different markets at different price points.

Importantly, the package has also delivered capability-building training for Australian wine businesses through the Growing Export Markets and Growing Wine Tourism education programs. Workshops have been delivered through 58 face-to-face workshops in 25 regions and also via webinar. Through the Wine Export Grants program, which concluded on 8 August 2019, 135 wine producers received $1.5M to support in-market promotional activities in China and the USA. 7 Independent performance review

As required under our Funding Agreement with the Australian Government, we commissioned an independent performance review of our operations by Forest Hill Consulting, who has carried out similar reviews for other Research and Development Corporations (RDCs).

The review, available on our website, concluded that:

‘Wine Australia is a well-managed, high-performing organisation. There is no evidence of Wine Australia having failed to fulfil, or being at risk of not fulfilling, all of the obligations required by its Funding Agreement with the Commonwealth or the Wine Australia Act. It is generally well regarded by stakeholders, has strong relevant key performance indicators, has met the vast majority of its target over the period and reports in a meaningful way. Its export assistance and regulatory functions are especially regarded by the sector as are its market insights activities.’

The review made 11 recommendations in relation to better practice, all of which have been adopted by the Board and they are being progressively implemented; a recommended review of extension is currently underway.

Strategic Plan

Within Wine Australia’s 5-year Strategic Plan, we set out 2 priorities and 12 related strategies that guide investment in RD&E, information provision, marketing activities and regulation. The activities and achievements section of this report covers the delivery against those strategies in more detail.

The current Strategic Plan concludes in 2020 and planning commenced this year to allow thoroughly informed consultation on the new Strategic Plan in 2019–20. The performance evaluation report, benefit–cost analysis of research and development projects and marketing activities, as well as Wine Australia’s first comprehensive stakeholder survey, carried out in July 2019, will inform the new strategy.

Wine Australia is working closely with Australian Grape & Wine Inc (AG&W), the new sector representative body formed by the merger of Australian Vignerons and the Winemakers’ Federation of Australia in February 2019, which is developing an overarching 30-year vision for the whole sector that will inform Wine Australia’s Strategic Plan 2020–25.

8 Thank you

This is my last report as Chair as I will be stepping down on 30 September 2019. I thank my fellow directors both past and present for their unique and collective contributions of skills, intellect and support over the past five years. I am particularly grateful to Brian Croser who has been deputy chair for most of my tenure and has been a constant source of personal support, as well as an inspiration emanating from his life-long desire and drive to elevate the global perception of Australian wine.

I thank our CEO Andreas Clark who, from the outset, has strongly led and developed a geographically dispersed team focussed on delivering service and support to our levy payers. His quiet and considered leadership and ability to engage widely with our stakeholders has brought out the best in our hard-working and committed global team. Wine Australia exists to support a prosperous Australian grape and wine community and those associated with the organisation can be proud of their contribution during the past year; I thank you all.

It has been a great privilege to serve the Australian grape and wine community in this role and notwithstanding the considerable natural and other challenges to confront, I am happy to sense a generally renewed confidence and enthusiasm across our Great Southern Land.

9 CEO’s report

‘Wine is so important for regional communities as it brings a three-stage economy to the bush. Wine production adds incredible diversity, opportunity, and value to our communities; and increasing export is the key to the sector finding its greater potential. When we connect across the whole sector, we give ourselves a chance to make better strategic decisions and capture a greater share of the international wine market. CEO Andreas Clark When you focus on export collectively, you shift your competitiveness to other wine producing countries and not the grower next door.’

Colin Bell, Viticultural consultant, Western Australia

Colin, a graduate of our Future Leaders Program, eloquently summed up Australian grape and wine’s contribution to regional communities.

Sector outlook

This past financial year, wine export values reached $2.86 billion and, importantly, the average price per litre for bottled wine exports lifted to $6.54 per litre, a record value.

Reflecting tightening supply, export volumes declined by 6 per cent, resulting in higher average value across both bulk and bottled wine of $3.58 per litre, an increase of 10 percent. The close correlation between export prices and winegrape prices continued, with winegrape prices increasing for the fifth year to an average price of $664 per tonne, the highest level since 2009.

The 2019 vintage was again consistent with the long-term average – despite concerns driven by constrained vintages in a number of regions, that the vintage would be well below normal. The breadth of Australia’s wine regions, viticultural expertise and the availability of irrigation in key regions serves to moderate production variables allowing for more secure business planning and supply relationships.

This year, the number of active exporters grew again to 2729, exceeding the record set in 2017–18 by 19 per cent. The 1866 companies that either started exporting during this period or increased the value of their exports contributed $386 million.

10 China Roadshow 2019 China Australian wine exports to China (including Hong Kong and Macau) reached a financial year record, increasing 7 per cent in value to $1.2 billion. Volume, however, decreased 16 per cent to 154 million litres (17 million 9-litre case equivalents) as exports of wines below $2.50 per litre FOB declined.

Australia is well-placed in China. In the six months to June 2019, the value of Australia’s wine imports to China (USD FOB) exceeded that of France by US$55 million. Australia’s imported market share has jumped 13 percentage points since 2015 to 24 per cent based on volume; compounded by the recent contraction of the total import market.

United States of America Pleasingly there was growth of 2 per cent to $432 million in exports to the USA in the year ended June 2019 but much work remains to increase our share in the world’s biggest wine market.

The New-to-Market program continues to deliver results for exporters seeking to enter the complex three-tiered system, and our education outreach has been escalated with additional resources and the AWD armoury.

11 Prowein 2019 Düsseldorf, Germany UK and Europe Despite a slight decline in exports to the UK during 2018–19, driven largely by uncertainty associated with Brexit, Australia maintained a 24 per cent share of the retail market by volume and 23 per cent by value. Australian wine companies continued to dominate the market with 3 of the top 5 brands being Australian and Australia retaining first place in off-trade wine sales by value.

Research, development and extension

In 2018–19, we achieved the first step in our long-term goal of establishing foundation data for the wine sector. In the past, we have relied on costly sector surveys to gain an understanding of our vineyard footprint. Following a 2-year project with Consilium Technology, we released the first National Vineyard Scan of 5 million hectares last year, which revealed: • the total area of vineyards (146,128 hectares) • the total length of vine rows (463,718 kilometres – enough to wrap around the Earth 11 times) • the average density of vine rows (3.17 kilometres/hectare) • the number of individual blocks identified (75,961).

The scan also provided the first comprehensive data of vineyards by the geographic indication (GI) region, ranging from the largest (Riverland, South Australia) to the smallest (Hastings River, New South Wales).

The scan suggested that the vineyard footprint had increased by a modest 11,000 ha since the previous survey-based data was published in 2015. Some of this variation may be attributable to the differences between the methods: survey versus sophisticated satellite scan data. Crucially, the scan will be more easily replicated and more regular reviews of vineyard area can be planned, and we now know the locations of all significant vineyard blocks. 12 In terms of biosecurity, we have been cooperating with other plant- based R&D agencies on increasing preparedness for a number of key threats, particularly Xylella fastidiosa, a bacterium exotic to Australia, that kills plants by multiplying rapidly within their fluid conducting vessels. This bacterium has been causing problems in California’s vineyards for over a decade but more recently has been causing devastation within Italy’s historic olive groves in Puglia. The bacteria can infect more than 250 genera affecting not only grapevines but olives, citrus and stone fruit including almonds.

We have also focused on translating research into resources that can be used by grapegrowers and winemakers, such as the grapevine rootstock selector tool. The tool collates decades of research into a simple web- based application and allows grapegrowers to make more informed choices about rootstocks to suit their soil, climate and varieties.

Similarly, outcomes of winery wastewater research were collated into a series of user guides available from our website.

A benefit–cost analysis of Wine Australia’s R&D investments found that, of the 6 key projects examined, the return ratio ranged from 1.6–5.3.

Wine Australia is collaborating with other Research and Development Corporations (RDCs) on projects where sharing research increases leverage, such as understanding and anticipating climate change, harnessing new technology in the fields of image analysis for better disease prediction and control, and yield assessment. We collaborate on two other cross-sector strategies: climate change and water use in agriculture under the National RD&E Framework and through Rural R&D for Profit programs. 13 Marketing

We are also collaborating with RDCs in marketing, including working with Meat & Livestock Australia, Dairy Australia and Hort Innovation promoting Australian food and wine in China.

The 2018–19 year has been a high watermark for marketing and promotion with the Australian Government’s $50m Package allowing us to deliver bigger, bolder events in the USA and China.

The year kicked off with 100 key USA influencers hosted at ‘Australia Decanted’ at Lake Tahoe in California. We took Australia to the USA and allowed the wine influencers to wrap themselves in Australian wine for four days, without the need to travel to Australia. Past president of the Court of Master Sommeliers, Andrew McNamara MS, told us: What Wine Australia did this week (at Australia Decanted) is something I never thought possible…you showed Australian wine as most of us knew it to be – without question one of the greatest wine-producing countries on earth. What you gave us, that was unprecedented, was access. Access to the icons of Australian wine. Access to our peers. Access to the unobtainable. When you asked me to put it on my calendar, you sold it as the greatest event Wine Australia has ever put on. You undersold it. Period. I am honoured and humbled to have been invited. I felt this week more like I was in Australia than when I was in Australia.

Obviously, we plan to build on this success when we return in September with Far From Ordinary, our greatest ever promotion in that market. Starting with events in New York, we will be visiting six key states and concluding at Lake Tahoe with Australia Decanted II.

Australia Decanted 2018

The United States remains the single largest wine market in the world and our strategies are focussed on getting a greater share, particularly in premium segments of that market, by growing the awareness and understanding of the diversity and quality of Australia wine. A recent survey by Wine Intelligence found that fewer than 50 per cent of USA wine consumers were even aware that Australia produced wine, so there is a significant promotion and education effort ahead. 14 China has been the powerhouse driving Australian wine exports over the past 4 years and, backed by the $50m Package, we have continued to consolidate Australia’s presence in the market. New initiatives in 2018–19 included the Australian Wine Month promotion that saw 2 major retail chains and 79 retail stores conduct Australian wine sales promotions across China. We supported the inaugural China International Import Expo trade fair and launched the Chinese version of our consumer website.

We also stepped up activities in our long-term markets, the UK and Europe, where the Australia Trade Tasting in London and Edinburgh, Prowein in Düsseldorf and the Nordics Roadshow are our key events.

Regulation

The regulatory and audit teams have had a busy year too – record levels of export shipments, registrations and many new exporters have increased queries and the work rate.

We have worked with exporters to address challenges in export markets including working with the Department of Agriculture and trade agencies to address the challenges of Brexit by developing export protocols for the UK market that can be implemented if and when needed. The export team continues to produce and update guides on exporting to 36 key destinations and produces ad hoc advice on request.

A rigorous approach has been taken to protecting Australia’s export reputation, with an export licence cancelled in the case of a business that did not keep proper records and sold wine that was incorrectly labelled.

Significant effort has been expended in the planning and development of new custom software for export approvals and an extensive communication and training program including both face-to-face and online training has been implemented to facilitate a smooth transition to the new system in the coming year.

Looking forward

In the coming year, the challenge is to maintain momentum as we push to deliver on the final year of the $50m Package and the peak in promotional efforts that will entail, and we will also need to ensure that we deliver lasting impacts from the Package. At the same time, we will be consulting with our stakeholders about our next five-year strategic plan.

I’d like to thank the Wine Australia team who passionately focus on delivering outstanding service for levy payers.

I would like to thank the Board both past and present for their guidance and support. In particular, I’d like to thank Brian Walsh, who will be stepping down in September. As Chair, Brian has guided Wine Australia from its creation and ensured that our focus is always on delivering value to our stakeholder community. I will not be the only one to miss Brian’s steady hand and considerable wisdom and generosity.

15 Our role

Wine Australia is governed by the Wine Australia Act 2013 (the Act). Our role under the Act is to: • coordinate or fund grape and wine research and development (R&D), and facilitate the dissemination, adoption and commercialisation of the results • control the export of grape products from Australia, and • promote the sale and consumption of grape products, both in Australia and overseas.

Our five-year Strategic Plan 2015–2020 and our Annual Operational Plan 2018–19 outline our key investment priorities, which are guided by the Australian grape and wine community’s priorities.

The Strategic Plan was developed following extensive consultation with grapegrowers, winemakers, sector bodies, government and other key stakeholders. It shows: • our vision is for a prosperous Australian grape and wine community • our priorities are to increase demand and the premium paid for all Australian wine and to increase competitiveness.

We seek to foster and encourage a prosperous Australian grape and wine community by investing in research, development and extension (RD&E), building markets, disseminating knowledge, encouraging adoption and ensuring compliance.

We work in partnership with a wide range of stakeholders along the supply chain. Australian Grape & Wine Inc (the merged entity incorporating the antecedent organisations the Winemakers’ Federation of Australia and Australian Vignerons) is our representative organisation under the Act.

We collaborate with our marketing and other like-minded partners on international engagement. These partners include wine businesses, Australian Government agencies such as Tourism Australia and Austrade, regional associations, state governments and other RDCs with market development responsibilities.

The Australian Government is a co-contributor of RD&E funding. We also work closely with the Australian Government to enhance market opportunities and reduce barriers to trade.

Our research providers include AWRI, CSIRO, the NWGIC, universities and state agencies.

We invest with other RDCs in cross-sectoral collaborative research to deliver RD&E benefits to the broader community.

Our governance and operations seek the best possible return on the investment of our RD&E, marketing and regulatory funds.

16 Performance 2018–19

Financial overview In line with expectations, we recorded an operating deficit of $1.85 million for 2018–19.

Our revenue comes from two main sources: winegrape growers, processors and exporters who pay statutory levies, and the Australian Government, which matches the money raised by these levies when it is invested in eligible R&D activities.

There are three levies: the Wine Grape Levy and the Grape Research Levy, which are based on winegrape production, and the Wine Export Charge, which is based on the FOB value of wine exports.

Approximately 32 per cent ($19.7 million) of 2018–19 revenue came from the 2 levies and the export charge and 23 per cent of revenue ($14.1 million) from the Australian Government matching contributions.

Revenue from regulatory fees made up 10 per cent ($5.9 million) of income, and wine sector contributions to marketing activities made up 2 per cent ($1.2 million) of total revenue for 2018–19.

The $50m Package made up 29 per cent ($17.5 million) of total revenue for 2018–19; this was made up of grant income, interest earned and sector contributions.

Net assets were $21.4 million at 30 June 2019 and financial assets were $17.8 million, of which all was cash or term deposits other than receivables of $4.7 million. Payables were $3.4 million.

Full details of our finances are included in the Financial Statements section of this report.

17 Annual Performance This Annual Performance Statement for the 2018–19 annual reporting Statement period has been prepared in accordance with section 39(1)(a) of the PGPA Act. In the opinion of the Wine Australia Board (as the authority accountable pursuant to section 12 of the PGPA Act), the Annual Performance Statements: • accurately present Wine Australia’s performance during the reporting period, and • comply with subsection 39(2) of the PGPA Act.

Further information about our performance against the Annual Operating Plan can be found within the Activities and Achievements section between pages 40 and 67.

A balanced portfolio In developing our Strategic Plan, Wine Australia conducted extensive consultations with our stakeholders. We sought to engage with the whole Australian grape and wine community so that everyone had the opportunity to contribute. Special efforts were made to ensure that the views of grapegrowers and winemakers around the country were heard, and there was an impressive level of engagement by stakeholders.

To identify key research and marketing priorities: • face-to-face meetings were held with the Wine Grape Growers Association Board and Executive, the Winemakers’ Federation of Australia Board and Executive (these organisations merged in February 2019 to create Australian Grape & Wine Inc), the Department of Agriculture, a number of the top 20 wine producers, AWRI, and grapegrowers and winemakers in the Riverland, Murray Valley, Riverina and broader NSW • facilitated workshops were conducted with RD&E providers, the Future Leaders Alumni, state and regional association representatives and Innovation Policy Committee members, and • we invited written submissions and received 60 identifying future priorities and suggested areas of focus.

We have used the strategic research priorities of the Australian Government and the Australian grape and wine community to inform our investments. While we receive funding from two separate levies, we do not differentiate between viticultural and winemaking research as the distinction is artificial – viticultural research often has a winemaking outcome and winemaking research often requires viticultural input. Instead, our value-chain approach to RD&E investments is aimed at increasing the sector’s long-term profitability and sustainability, which benefits all levy payers and the wider community.

Our investments range from both short- and long-term applied R&D to blue-sky research where success is less assured. We assess the likelihood of success and the extension and adoption potential of all RD&E project applications as part of the overall ranking of proposals. We focus on extracting the full value of our investments in RD&E for the benefit of our levy payers, the Australian Government and the wider community.

The charts and tables on the following pages provide an overview of how our investments are allocated across term, risk, research or extension and geographical focus.

18 Figure 1: Investment by project term

Short (<2 years) 8%

Medium (2–4 years)

19% Long (>4 years)

73%

Table 1: Investment by project term Project Term Number of projects Actuals 2018–19 short (<2 years) 49 27% $1.74 8% medium (2–4 years) 60 33% $4.41 19% long (>4 years) 74 40% $16.74 73%

Total 183 100% $22.9 100%

Figure 2: Investment by risk category

Low

Medium 26% 31% High

46%

Table 2: Investment by risk category Risk Number of projects Actuals 2018–19 low 68 37% $5.2 23% medium 65 36% $10.6 46% high 50 27% $7.0 31%

Total 183 100% $22.9 100%

19 Figure 3: Investment by research type

Extension 11% Capability 26%

15% Strategic

Adaptive

48%

Table 3: Investment by research type Research type Number of projects Actuals 2018–19 Extension 30 16% $2.5 11%

Capability 50 27% $3.4 15%

Strategic 57 31% $11.0 48%

Adaptive 46 25% $5.9 26%

Total 183 100% $22.9 100%

Figure 4: Investment by geographic focus

Regional 12% National

88%

Table 4: Investment by geographic focus Geographic focus Number of projects Actuals 2018–19 regional 28 15% $2.7 12%

national 155 85% $20.2 88%

Total 183 100% $22.9 100%

20 Our strategic priorities

To achieve our goal of a prosperous Australian grape and wine community, we focus on 2 priorities and 12 strategies.

Goal: A prosperous Australian grape and wine community Priority 1: Increasing demand and the Strategy 1: Promoting Australian fine wine premium paid for all Australian wine • Asia Pacific • China • North America • UK and Europe

Strategy 2: Protecting the reputation of Australian wine

• Annual analytical survey • Regulatory services • Label Integrity Program

Strategy 3: Building Australian vine and wine excellence • Grapegrowing for excellence • Wine provenance and measures of quality • Customer insights

Priority 2: Increasing competitiveness Strategy 4: Improving resource management and sustainability

• Climate adaptability • Foundation data • Biosecurity, pest and disease • Sustainable resource management management

Strategy 5: Improving vineyard performance • Enhancing grapevine and rootstock performance • Efficient and sustainable vineyard management

Strategy 6: Improving winery performance • Enhancing yeast and bacterial performance • Efficient winery production

Strategy 7: Enhancing market access • Market access

Strategy 8: Building capability • Developing people

Strategy 9: Business intelligence and measurement • Business intelligence • Monitoring and evaluation

Extension and adoption Strategy 10: Extension and adoption

Supporting functions Strategy 11: Corporate Affairs • Corporate Affairs • Sector engagement

Strategy 12: Corporate Services • Finance and administration • Information and communications • People and culture technology

21 Strategic plan Targets and outcomes 2018–19

Strategic plan targets Two key targets are defined in Wine Australia’s Strategic Plan: 1. The average price per litre for Australian bottled wine exports increase to a point where it is at or near the highest average price per bottle of our global competitors by key markets. 2. Australian vineyards and wineries are efficient by global standards.

Priority 1: Target 1: The average price per litre for Australian bottled wine exports Increasing demand increases to a point where it is at or near the highest average price per and the premium paid bottle of our global competitors by key markets. for all Australian wine Target 1 is evaluated by tracking the average price per litre for Australian bottled wine exports in Australian dollars (A$) against that of the top five competitors in the key markets of China, USA, UK and Canada using trade data sourced from the Global Trade Atlas.

2018–19 target: The average price per litre for Australian bottled wine exports increases year-on-year from $5.87 in June 2018.

2018–19 result: The average price per litre for Australian bottled wine exports reached a record $6.54 per litre in the year ending June 2019, an increase of 33 per cent from the level at the implementation of the 5-year Strategic Plan in July 2015

Figure 5 illustrates Australia’s performance against Target 1. For simplicity, the performance of Australia’s average bottled wine price has been ranked against the competitor nation with the nearest highest price in each market. As can be seen in each of the major markets, Australia has performed well against its nearest competitor. In China, while the average value fell a little, Australia still achieves a higher average value than France. In other markets, Australia lags the leading price setter but, positively, has increased its average bottled price over the preceding financial year.

22 Figure 5: Average Australian bottled wine prices compared with competitor nation average bottled wine prices

10.28

9.45

8.59 8.53 8.31 8.16 8.34 7.71 7. 61 7.31 6.93 6.76

4.85 4.75 4.44 4.36 Average value of bottled wine exports (A$ per litre) of value Average

France Australia Italy Australia France Australia US Australia

China US UK Canada

MAT June 2018 MAT June 2019

While Target 1 relates to bottled average value, the value of Australian unpackaged wine exports increased by 12 per cent to $1.21 per litre, and as Figure 6 illustrates, is also showing a consistent positive trend since 2016–17.

Figure 6: Unpackaged and bottled wine average price trends

Unpackaged (left-hand axis) Bottled (right-hand axis)

1.6 6.5

1.5 6.0

1.4 Bottled average value (A$ per litre FOB) 5.5

1.3 5.0 1.2 4.5 1.1

4.0 1.0 Bulk average value (A$ per litre FOB) (A$ per litre value Bulk average

0.9 3.5

0.8 3.0

2010–11 1991–921992–931993–941994–951995–961996–971997–981998–991999–002000–012001–022002–032003–042004–052005–062006–072007–082008–092009–10 2011–122012–132013–142014–152015–162016–172017–182018–19

23 The increase in values for bottle and unpackaged wines have been reflected in increased wine grape prices, as illustrated in Figure 7.

Figure 7: Average export price and average winegrape purchase price over time.

Average export price Average grape ($ per litre FOB) price ($ per tonne)

6.00 1000 900 5.00 800 700 4.00 600

3.00 500 400 2.00 300 200 1.00 100 0.00 0

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Financial year

24 Priority 2: Strategic Plan target: Australian vineyards and wineries are efficient by Increasing global standards. competitiveness Target 2 is measured in two ways. Firstly, by benchmarking the adoption of five viticultural practices and five oenological practices in Australia to establish a competitiveness indicator. And secondly, through a benefit– cost analysis of selected R&D projects.

Benchmarking adoption of viticultural practices and oenological practices

2018–19 target: Set benchmarks to measure practice change for the five viticultural and five winemaking practices identified.

The five key viticultural activities are pest and disease (including trunk diseases and biosecurity); rootstocks; spray application; vine balance/ grape quality measures; and adaptation to climate change (including delayed pruning, clonal trials).

The five oenological practices are: clarification and filtration (including flotation/cross flow); cold stabilisation; wine efficiency (including Lean principles, ABC tool and energy); fermentation monitoring; and faults and taints (including smoke taint and copper additions).

2018–19 result: During 2017–18, a survey was carried out to set benchmarks for performance. This review found 56 per cent of respondents indicated that they had acted on information promoted by Wine Australia.

Drawing on data from the review, the following benchmarks were set: • Level of awareness of Wine Australia’s information and activities – 2018 result: 7.1 (out of 10). • Usefulness of information provided – 2018 result: 7.4 (out of 10). • Percentage who have acted on information promoted by Wine Australia – 2018 result: 56 per cent. • Grape growers – 56 per cent select rootstocks to the specifications of their vineyard. • Grape growers – 88 per cent actively taken steps to reduce spray drift. • Wine producers – awareness of wine efficiency research – 5.0 (out of 10).

We have commissioned an independent review to identify how we can change our extension activities to enhance adoption, and we have also worked with our extension partners to make these 10 key viticultural and oenological practices a focus of their extension activities.

A follow-up survey has been commissioned to assess progress but had not been completed at the time of compiling this report.

25 Benefit–cost analysis of R&D projects

The second component of assessment against Target 2, a benefit–cost analysis of selected R&D investments, was conducted to assess performance in line with the strategic plan during 2018–19.

To evaluate the value of Wine Australia’s R&D investments, AgEconPlus was commissioned to undertake an ex-post benefit–cost analysis of six randomly selected projects.

The projects were: • AWRI 2.2.1 Collecting and disseminating information regarding agrochemicals registered for use and maximum residue limits in Australian viticulture (MRL data) • AWR 1304 Ensuring the continued efficacy of Brettanomyces control strategies for avoidance of [wine] spoilage (Brettanomyces) • CSP 1401 Understanding and manipulating small signalling molecules to affect the yield/flavour (‘quality’) nexus (PGR) • CSP 1402 Evaluating and demonstrating new disease-resistant varieties for warm irrigated regions (Varieties) • NWG 1401 Metal ion speciation: Understanding its role in wine development and generating a tool to minimise wine spoilage (Ion Speciation), and

• DPI 1202 Impact of elevated CO2 and its interaction with elevated

temperature on production and physiology of Shiraz (CO2 Shiraz)

AgEconPlus’ approach followed the general evaluation guidelines that are now well established within the Australian rural research sector including RDCs, Cooperative Research Centres and some universities.

Consistent with Council of Rural Research and Development Corporation Guidelines for random project selection, projects in a list provided by Wine Australia were numbered 1 to 37, AgEconPlus then used an online random number generator to select projects. Projects were selected until research investment exceeded $4.7 million or around 10 per cent of Wine Australia’s total RD&E investment.

Each of the six projects analysed involved a description of the projects including objectives, outputs, activities, costs, outcomes and benefits. Benefits were described qualitatively according to their contribution to the triple bottom line of economic, environmental and social benefits. While a range of potential benefits of each program were identified, the analysis focused on the most likely and most significant benefit stream.

Some identified benefits were not quantified mainly due to: • suspected, weak or uncertain scientific or causal relationship between the research investment and the actual R&D outcomes and associated benefits; and/or • The magnitude of the value of the benefit was thought to be only minor.

A number of potential benefits therefore remained unquantified and hence the estimated net benefits of some programs should be considered conservative.

26 The six investment analyses yielded positive results at the 5 per cent discount rate, with benefit–cost Ratios ranging from 1.6 (DPI 1202

Impact of elevated CO2) to 5.3 (NWG 1401 Ion speciation). The results show a positive result in terms of those benefits valued and also in terms of the range of benefits identified.

Overall, the estimated benefits and costs of the Wine Australia projects show that the returns on the grower, Commonwealth Government and co-investor monies have been significant.

Table 5: Benefit–Cost Analyses of six randomly selected Wine Australia R& D investments 2017–18 Investment program Ion Investment criteria MRL data Brettanomyces PGR Varieties CO2 Shiraz Speciation (AWRI 2.2.1) (AWR 1304) (CSP 1401) (CSP 1402) (DPI 1202) (NWG 1401) Benefit–cost ratio 1.80 2.13 5.07 3.38 5.28 1.57

Benefit–cost ratio range-core assumption 0.72 to 3.60 1.07 to 4.48 2.38 to 11.64 0.79 to 13.19 2.64 to10.57 0.79 to 2.36 sensitivity

Grape Avoided Avoided Avoided cost Avoided Data on juice with remedial grape loss – of mildew copper MRL future additional processing overripe fruit breaches irrigation Potential blending cost water needs unquantified benefits Minimisation Reduced Improved Capacity More of chemical waste and harvesting building in productive residues on electricity use logistics researchers regions farm and students

27 Table 6: Summary of economic, environmental and social benefits of selected Wine Australia projects. Project Benefits AWRI 2.2.1 Economic Collecting and • Avoided cost of market closure due to failure to meet revised agrochemical disseminating information residue limits. regarding agrochemicals • Grapes and juice with lower agrochemical residues enhancing the flexibility of registered for use and wine production in terms of increasing blending opportunities. maximum residue limits • Maintenance of the status quo with respect to self-regulation and avoidance of (MRL) in Australian high compliance costs associated with legislated regulation. viticulture (MRL data) Environmental • Minimisation of chemical residues on farm with the potential to avoid adverse impacts on biodiversity and water catchments.

Social • Regulatory compliance on agrochemicals. • Additional AWRI staff trained in the identification and resolution of agrochemical issues and available for other research projects.

AWR 1304 Economic Ensuring the continued • Avoided quality downgrades due to premature failure of the Brettanomyces control efficacy of Brettanomyces strategy based on the use of sulfites. control strategies for • Avoided cost of remedial processing activities (e.g. additional filtration and barrel avoidance of [wine] washing/barrel replacement) due to premature failure of the Brett control strategy. spoilage (Brettanomyces) Environmental • Reduced requirements for inputs and wastage including electricity generation (carbon) savings and avoided consequences of unnecessary waste treatment and disposal.

Social • Possible negative health impacts from wine consumers adversely impacted by sulfite allergies (e.g. asthma, hay fever and hives). • AWRI staff trained in yeast analysis and available for other research projects.

CSP 1401 Economic Understanding and • Avoided capital costs at wineries processing grapes grown in warm inland areas and manipulating small requiring fewer tanks and other capital equipment to cope with compressed seasons. signalling molecules to • Improved grape and wine quality realised as marginally higher prices for Shiraz affect the yield/flavour grapes grown in warm inland areas. (‘quality’) nexus (PGR) • Avoided grape loss associated with having to harvest overripe fruit. • Improved harvesting logistics/reduced costs due to decompression of the harvest window.

Environmental • Application of a plant growth regulator (PGR) that is understood to be safe. • Reduced chemical inputs for the treatment of low acid ferments associated with high-sugar grapes.

Social • Increased availability and consumption of flavoursome, moderate alcohol wines.

28 Table 6: Summary of economic, environmental and social benefits of selected Wine Australia projects. (continued) Project Benefits CSP 1402 Economic Evaluating and • Saved operating costs from a reduction in the use of chemical fungicides for demonstrating new disease the control of powdery and downy mildew. resistant varieties for warm • Increased saleable production with fewer grapes affected by powdery or irrigated regions (Varieties) downy mildew.

Environmental • Reduced use of chemical fungicides in the vineyards to manage mildew.

Social • Reduced health risks for vineyard employees working with fungicides.

NWG 1401 Economic Metal ion speciation: • Avoided loss in white wine quality. Understanding its role • Early warning on copper MRL breaches. in wine development and generating a tool to Environmental minimise wine spoilage • More judicious use of chemicals (copper overdosing) to control sulfidic off-odours (Ion Speciation) and minimisation of the amount of waste produced.

Social • Capacity – post-doctorate fellow and CSU research staff with additional skills in the analysis of metals and sulfur in wine. • Capacity – CSU and Adelaide University students trained with up-to-date information on sulfur and copper management in wine.

DPI 1202 Economic

Impact of elevated CO2 and • Avoided costs due to earlier development and uptake of adaptive vineyard its interaction with elevated management strategies (i.e. canopy management). temperature on production and physiology of Shiraz Environmental

(CO2 Shiraz) • Information to help plan trade-offs between production and environmental water in a hotter, dryer Murray–Darling Basin.

Social • Reassurance that climate change may not result in an increased demand for water from wine sector with increased optimism for the future. • More productive and profitable regional communities especially in the irrigated inland wine grape production areas of Australia. • Capacity – degree by research completed and additional skill sets developed in the research organisations DPR, CSIRO, University of Adelaide, University of Melbourne – Primary Industries Climate Change Centre (PICCC) and AWRI. • Capacity – creation of a unique research facility; an open topped chamber for

the study of perennial crops with adjustment for both CO2 and temperature.

29 Investment 1% 1%

Priority 1 allocation 8% Priority 2 26%

Priorities 1 & 2

ERWSP 32%

Supporting functions

23% Board, GI Committee and AWO program

9% Levy collection costs

Table 7: Expenditure, by groupings and total, for 2017–18

Groupings $m Priority 1: Increasing demand and the premium paid for all Australian wines

Strategy 1: Promoting Australian wine 8.65

Strategy 2: Protecting reputation of Australian wine 2.01

Strategy 3: Building Australian grape and wine excellence 5.46

Total Priority 1 16.12

Priority 2: Increasing competitiveness

Strategy 4: Improving resource management and sustainability 3.41

Strategy 5: Improving vineyard performance 5.26

Strategy 6: Improving winery performance 2.49

Strategy 7: Enhancing market access 0.71

Strategy 8: Building capability 1.11

Strategy 9: Business intelligence and measurement 1.52

Total Priority 2 14.49

Strategy 10: Extension and adoption 5.55

Total Priority 1 & 2: Extension and adoption 5.55

Supporting functions

Strategy 11: Corporate Affairs 0.71

Strategy 12: Corporate Services 4.56

Total supporting functions 5.28

$50m Package 19.84 Other

Board, Geographical Indications (GIs) Committee and Australian wine overseas program 0.67

Levy collection costs 0.89

Other total 1.56

Total 62.84

30 Key performance We have nine overarching key performance indicators against which we indicators measure and report on our performance against our strategic priorities and the Australian Government’s priorities. These are detailed in Table 8.

Table 8: Performance against Agriculture Portfolio Budget Statements 2018–19 measures

Key performance indicators Target Outcome RD&E

Projects are funded in line with the approved Annual Operational Plan. 100% 100%

Contracts are actively managed through regular and ongoing monitoring 100% 100% of the research.

An increased number of RD&E subscribers 2500 3599

The number of regional clusters participating in the Regional Program is maintained 11 11

Marketing

Export and Regional Wine Support Package activities are completed in line with 100% 100% the funding agreement.

Wineries and distributors who participate in Wine Australia events report that they At least 93% are satisfied. 90%

Market Insights

Improvement in customer satisfaction rating for market insights services 75% 86%

Regulatory Services

Risk-based audits reinforce a culture of compliance and help protect the reputation 300 191* of Australian wine. audits

Market export guides provide accurate information about import requirements for 33 guides 36 guides largest export markets

* A culture of compliance was reinforced outside the auditing program through direct engagement with stakeholders and education, more detail is provided on page 45.

31 Aligning priorities Our research program investment (including administrative expenses) aligned with the Australian Government’s Science and Research Priorities (Table 9) and Rural Research, Development and Extension Priorities (Table 10).

Table 9: Wine Australia research program spending alinged with Science and Research portfolio Science and Research Priorities

Environmental Wine Australia priorities and strategies Food 1.1 Food 1.3 Total Change 8.3

$000 $000 $000 $000 Priority 1: Increasing demand and the premium paid for all Australian wines Strategy 3: Building Australian grape and wine excellence 209.1 5,003.2 5,212.3 (0.9%) (21.6%) (22.6%) Priority 2: Increasing competitiveness Strategy 4: Improving resource management and 123.8 1,707.7 1,296.4 3,127.9 sustainability (0.5%) (7.4%) (5.6%) (13.5%)

Strategy 5: Improving vineyard performance 5,109.1 5,109.1 (22.1%) (22.1%)

Strategy 6: Improving winery performance 2,417.9 2,417.9 (10.5%) (10.5%)

Strategy 7: Enhancing market access 291.8 291.8 (1.3%) (1.3%)

Strategy 8: Building capability 19.8 906.3 4.5 930.6 (0.1%) (3.9%) - (4.0%)

Strategy 9: Business intelligence and measurement 908.9 908.9 (3.9%) (3.9%) Priorities 1 and 2 Strategy 10: Extension and adoption 5,115.1 5,115.1 (22.1%) (22.1%)

Total 644.5 21,168.2 1,300.9 23,113.6 (2.8%) (91.6%) (5.6%) (100.0%)

32 Table 10: Wine Australia research program spending aligned with Rural Research, Development and Extension Priorities Rural Research, Development and Extension Priorities

Soil, water and Wine Australia priorities Advanced Adoption of Biosecurity managing Total and strategies Technologies R&D natural resources

$000 $000 $000 $000 $000 Priority 1: Increasing demand and the premium paid for all Australian wines Strategy 3: Building Australian 4,209.6 851.3 151.5 5,212.3 grape and wine excellence (18.2%) (3.7%) (0.7%) (22.6%) Priority 2: Increasing competitiveness Strategy 4: Improving resource 340.2 1,011.8 1,775.9 3,127.9 management and sustainability (1.5%) (4.4%) (7.7%) (13.5%)

Strategy 5: Improving vineyard 5,109.1 5,109.1 performance (22.1%) (22.1%)

Strategy 6: Improving winery 2,417.9 2,417.9 performance (10.5%) (10.5%)

Strategy 7: Enhancing market 291.8 291.8 access (1.3%) (1.3%)

Strategy 8: Building capability 167.5 20.4 37.7 705.0 930.6 (0.7%) (0.1%) (0.2%) (3.1%) (4.0%)

Strategy 9: Business intelligence 146.5 167.8 594.6 908.9 and measurement (0.6%) (0.7%) (2.6%) (3.9%) Priorities 1 and 2 Strategy 10: Extension and 168.7 12.0 4,934.3 5,115.1 adoption (0.7%) (0.1%) (21.3%) (22.1%)

Total 7,450.3 1,032.2 7,953.8 6,677.2 23,113.6 (32.2%) (4.5%) (34.4%) (28.9%) (100.0%)

33 Export and Regional Wine Support Package

The background The Australian Government’s $50 million Export and Regional Wine Support Package (the $50m Package) is an exciting, one-off allocation of $50 million over four years, which aims to grow the Australian wine sector by showcasing the nation’s wine tourism offering and driving demand for Australian wine exports. In 2017–18, it entered its delivery phase following extensive consultation.

Since then, Wine Australia has worked with AG&W and Cider Australia to implement the four programs within the $50m Package. These include international marketing campaigns ($32.5 million), wine export, state- based and competitive grants ($11 million), capability development ($2 million) and the development of a brand strategy for the craft cider industry ($500,000).

The strategy underpinning the $50m Package is to target markets with the strongest growth potential: namely, China and the USA. A portion of funding is also allocated to allow flexibility to respond to signals in other markets where there is potential for export value growth.

In the USA, the opportunity for growth is at the higher price points so our focus is on raising the perception of, and demand for, Australian wine. In China, the challenge for the Australian wine category is to maintain and build on our strong image and continue to capture growth in this highly competitive market.

The four programs within the $50m Package

China and USA marketing Capability development Grants Transforming cider businesses ($32.5m) ($2m) ($11m) ($0.5m)

Targeted multi-year marketing Development and delivery Wine Export Grants that build Development of a brand campaigns that improve the of education programs the capacity of small and proposition and go-to-market perception and awareness of and toolkits to improve medium wine businesses to strategy for the Australian Australian wine in China and the capability of wine capture export opportunities cider industry based on US markets, as well as the businesses to capture export in China and the USA. detailed market analysis. premium paid. opportunities and develop wine tourism products State-based and competitive and services. grants for initiatives that increase international wine tourist numbers and expenditure across the states and regions.

34 Last year, 2018–19, was hugely exciting for the $50m Package as many projects that will deliver enduring benefits to the Australian grape and wine community moved from design and development into implementation.

Projects that have come to fruition include our award-winning Australian Wine Discovered education program, our consumer website, which is available in English and Simplified Chinese, our online export market analysis tool Market Explorer, and the Growing Wine Exports and Growing Wine Tourism capability-building programs. These investments will continue to provide value well after the conclusion of the $50m Package.

The year kicked off in amazing fashion with 100 key USA influencers hosted at Australia Decanted at Lake Tahoe. Other highlights included Aussie Wine Week USA, ProWine China, and China Food and Drinks Fair in Chengdu, before concluding with a record 88 producers joining us for Wine Australia’s eighth China Roadshow.

All events are now spearheaded by the Australian Wine Made Our Way branding and feature Australian Wine Discovered education sessions, two early products and enduring benefits of the $50m Package.

These in-market events have been backed by an extensive visits program. In 2018–19, Wine Australia hosted more than 50 key influencers from China and USA trade, media and education, to provide an immersive Australian fine wine and tourism experience in regions across all major wine producing states.

APAC Media Trip 2018

35 State and competitive grants by region NORTHERN TERRITORY Competitive grant projects State grant projects

WESTERN AUSTRALIA QUEENSLAND

SOUTH AUSTRALIA

NEW SOUTH WALES

VICTORIA

TASMANIA

The grants program has awarded more than $1.3 million in Wine Export Grants. This has facilitated over 120 wine businesses to travel overseas and promote their brand in-market.

There are 21 regional international wine tourism projects underway through the Competitive Grants program and 6 state-based projects through the State Grants program. These include international marketing and visiting friends and relatives (VFR) initiatives, virtual reality creations, website development and translation, wine trail establishment, research, strategy development and much more.

Development of the Growing Wine Exports and Growing Wine Tourism programs was completed with 40 workshops subsequently delivered in more than 30 wine regions and the information is also available online and in webinar formats.

The Growing Wine Exports workshops feature live discussions with Wine Australia’s USA Market Entry Program Manager, Chinese dining experiences and insights into Chinese business practices, a review of key market analysis, the ins and outs of identifying and pitching to importers and distributors, and preparing for a market visit. The workshops also include a hands-on demonstration of the online Market Explorer tool that offers unprecedented access to export market data.

The Growing Wine Tourism workshops and webinars offer advice on developing or refining a winery’s unique value proposition, mapping its visitor journey, pricing for profit, insights into visitor behaviour and perceptions, practical advice for navigating wine and travel distribution systems and more. 36 Growing Wine Tourism workshop in Hunter Valley The 2018–19 financial year has also seen the launch of the Australian craft cider category brand proposition and, in a world-first for cider, a trust mark that helps consumers identify ciders made with ‘100% Australian grown’ fruit.

The administration of the package was independently evaluated mid-term by strategic governance consultants Forest Hill Consulting. Forest Hill found that: The ERWSP is very tightly managed by Wine Australia. Strong governance and delivery structures and processes have been established and these appear to be working effectively. Monitoring, evaluation and reporting is comprehensive, and risk is managed systematically’...‘Overall, the Package is on track for delivery against the workplan.

The Marketing Advisory Group of experts from the sector continues to provide advice on the capability development activities, the development and implementation of the Australian Wine Made Our Way brand and the China and USA marketing campaigns.

The 2019–20 year will be the final year of the $50m Package and promises to be another significant year, with a major engagement program – the Far From Ordinary campaign planned for the USA – kicking off in New York in September and concluding with Australia Decanted at Lake Tahoe, with a six-city trade and consumer roadshow in between.

We will drive awareness of Australian fine wine across our social and digital media channels and with media partners such as Condé Nast.

In China we will continue to be active at Vinexpo Hong Kong, a four-city China Roadshow, the China Awards (for trade, media and educators who have raised the profile of Australian wine in China) and in-store promotions with large retail chains, such as Ole’ and Sam’s Club in China. 37 38 Activities and achievements

40–49 Priority 1: Increasing demand and premium paid for all Australian wine

50–63 Priority 2: Increasing competitiveness 64 Priorities 1 & 2: Extension and adoption 65–67 Supporting functions

39 Priority 1: Increasing demand and the premium paid for all Australia wine

Strategy 1: 2018–19 was a year of strategic thinking, integrated marketing Promoting campaigns, bigger and better events and invigorated social and digital channels. The Australian Government’s $50m Package continued to Australian enable Wine Australia to have a greater global marketing presence, be fine wine innovative and boost the scale of the marketing campaigns we were able to deliver in the USA and China.

The Australian Wine Made Our Way brand platform underpins all our marketing campaigns globally, resonating with the wine sector and target audiences. The brand and its key messaging pillars allowed us to talk confidently to trade and consumers, selling the story of Australian wine and weaving in tourism messages.

Leveraging the camaraderie, which is unique to our community and culture, we have brought the wine sector together around the world, engaging gatekeepers, key influencers, media, consumers and tens of thousands of members of the wine trade.

The Australian Wine Discovered (AWD) education platform was officially launched in January 2019, quickly setting the benchmark in wine education globally. The comprehensive, free, digitally-accessed education program provides detailed guides, presentations, videos, tools and resources for anyone to use. There are 25 modules available in English with 9 modules being translated into Mandarin for the China market.

This year we reset our engagement strategy across digital and social channels, allowing us to broaden our audience reach to include consumers and build awareness and understanding of Australian wine. We launched www.australianwine.com, amplifying Made Our Way and telling stories of our people and places.

We reset our social strategy to ensure relevant content is served to a relevant audience and invested in paid social media campaigns to amplify our message globally.

The marketing team delivered activations that lived up to the operational excellence for which we are known. There were over 110 integrated campaigns across different marketing channels: on-premise and online sales promotions, large trade events, media and influencer visits to Australia, educator training and always-on public relations activity.

40 Partnerships and sponsorships

We worked closely with regional associations, state tourism commissions, Austrade and Tourism Australia to build international awareness of Australia’s fine food and wine culture. During 2018–19, we also partnered with the following organisations, campaigns and events: • Court of Master Sommeliers, in Australia and global chapters • Sommeliers Australia • James Halliday Wine Companion Awards • G’day USA • Gourmet Traveller Wine List of the Year Awards, and • the China collaboration project (with Dairy Australia, Horticulture Innovation Australia and Meat & Livestock Australia).

In-market activities

China (including Hong Kong and Macau) China continues as our most valuable market for wine exports and our market position remains strong with growth in value and demand, reputational integrity and positive consumer perception. The China– Australia Free Trade Agreement, which saw tariffs eliminated on 1 January 2019, continues to bolster relaitons and support exports.

Premiumisation continues to be the focus of our marketing efforts, leveraging our food and wine credentials. Campaigns in market focus on reinforcing attributes that make Australia and our wines unique.

AWD is being rolled out through our Trade Specialist program members, our educator and retailer networks, and via social media. Modules are being translated into Mandarin to support the demand for wine knowledge among trade and consumers.

New initiatives were undertaken in 2018–19 such as the Australian Wine Month promotion, which saw 2 major retail chains and 79 retail stores conduct Australian wine sales promotions across China. The TMall store is always-on and a WeChat mini-program was trialled during the China Roadshow. We supported the inaugural China International Import Expo trade fair, launched the Chinese version of our consumer website – www.australianwine.com/zh-CN – and brought 12 key trade and media to Australia.

Our large-scale activities continued with Australia’s strong presence at ProWine and the Chengdu Hotel Show and Food & Drinks Fair as well as our own four-city China Roadshow. The China Award categories were enhanced to recognise more media and key influencers and the VIP gala dinner was moved to the eve of ProWine, attracting leading international media and our VIP trade partners.

41 Key in-market activities in 2018–19 included: • Hong Kong Wine and Dine Festival – October 2018 • CIIE – November 2018 • Wine Australia China Awards – November 2018 • ProWine China – November 2018 • Taiwan Trade Show – November 2018 • China National Food, Wine and Spirits Fair, Chengdu – March 2019 • China trade and media visit – April 2019 • Australian Wine Month – May 2019 • China Roadshow – May 2019 • TMall Store – year-round.

China Roadshow master class

Asia The Emerging Markets Roadshow, which travelled to the Philippines, Thailand, Sri Lanka and Vietnam, was the major marketing activation in 2018–19. Some 18 wineries travelled to these markets to be connected with importers, wholesalers and distributors. Through our insights team and the Austrade partnership, detailed market consumer, regulatory and trade insights were provided to participants.

The Australian Grand Tastings were held in Japan and Korea and the media visit to Australia produced some excellent coverage in traditional and digital media.

Key in-market activities in 2018–19 included: • Australian Wine Grand Tastings, Japan and South Korea – September 2018 • Emerging Market Roadshow – September & October 2018. 42 North America Marketing efforts in the Americas focus on engaging key gatekeepers and increasing positive sentiment for premium Australian wine. The results of the Australian wine brand and campaigns are starting to show, with a welcome return to growth for the USA in 2018–19, by 2 per cent in value to $432 million, with increases across most major price points.

Sentiment is starting to shift through media partnerships, public relations activity and world class events such as Aussie Wine Week and the three-day immersive educational program for 100 key influencers – Australia Decanted. Commentary in leading media such as The New York Times is extremely positive and our partnerships with key influencers are supporting the perception change.

The New-to-Market program continues to deliver results for exporters seeking to enter the complex three-tiered system, and our education outreach has been escalated with additional resources and the AWD armoury.

Wine Australia activities to support the important Canadian market included hosting key buyers, sommeliers and media in Australia as well as the Toronto Winter Trade Tasting, Australia Up Close roadshow and sponsored presence at Vancouver International Wine Festival.

Key in-market activities in 2018–19 included: • Australia Decanted – July 2018 • Aussie Wine Week – September 2018 • Winter Trade Tasting, San Francisco – February 2019 • Wine Spectator Advertising and Media partnership – year-round • Market Entry Program – year-round, and • Buyer, media & influencer visits – year-round.

UK and Europe Despite a slight decline in exports to the UK, driven by Brexit uncertainty, Australia maintains a 24 percent share in volume and 23 percent in value. The core campaigns in the UK and Europe are the Australian Trade Tastings (ATT), the biggest international wine trade show ProWein, and the Nordic Roadshow.

As the UK is the heartland of wine education globally, AWD was launched at ATT, where it received strong praise. Relationships with WSET and IMW are positive and educational tastings are held for trade and media throughout the year. Leading educators and media visited Australia and we continually build positive sentiment through proactive media outreach.

Key in-market activities in 2018–19 included: • Nordic Roadshow, Denmark, Finland, Norway and Sweden – September to October 2018 • Off the Vine – September 2018 • Australian Wine Discovered launch – January 2019 • Australian Trade Tastings, Ireland, Scotland and England – January 2019 • ProWein International Wine Fair, Germany – March 2019 • The Big Fortified Tasting – April 2019, and • Buyer, media & influencer visits.

43 Strategy 1: Promoting Australian fine wine 2018–19 targets 2018–19 achievements Global An educational component at 70 per cent of events to The 70 per cent target was achieved at all events through promote Australian wine’s strategic narrative – quality, master classes, seminars, tasting events and supporting diversity, innovation, terroir. social media content.

Strengthen existing relationships and develop new Media and influencer KPIs were achieved or exceeded relationships with key in-market wine trade, media and for all campaigns with new relationships formed, other wine influencers. particularly with lifestyle media and influencers.

At least 75 per cent of guests indicate a positive/ This target was achieved with exactly 75 per cent of improved perception change towards Australian wine, attendees or visitors survey post event leaving with an captured with post-event survey. improved perception of Australian wine. Asia Pacific Growth in consumer sentiment index in Hong Kong The consumer sentiment index data derived by Wine from 7.52, in Japan from 7.38, in Singapore from 6.94 Intelligence for Hong Kong fell slightly to 7.06 (out of 10), and in South Korea from 6.49. while Japan scored 7.33. Singapore moved up to 7.47 and South Korea moved up from 6.49 to 6.95. China Growth in consumer sentiment index in mainland China The consumer sentiment index on mainland China moved from 8.32 . from 8.32 to 8.56.

Europe, Middle East and Africa (EMEA) Growth in consumer sentiment index in the UK from 8.08. The consumer sentiment index in the UK remained a solid 8.14, an increase over the previous year.

The Americas Growth in consumer sentiment index in Canada from The consumer sentiment index for Canada (as assessed 8.34 (English speaking) and from 7.96 (Quebec) and by Wine Intelligence) was 8.19 in the English speaking the USA from 8.14. regions and 7.68 in Quebec while in the US it was assessed as 7.89.

Strategy 2: Label Integrity Protecting the Wine Australia has coercive powers that allow its inspectors to enter reputation of wineries and inspect records kept under the Label Integrity Program to Australian wine ensure the truth of claims made on wine labels, or made for commercial purposes in other ways, about the vintage, variety and geographical indication of wine manufactured in Australia. In 2018–19, we conducted 191 on-site inspections.

It is also open to us to request records kept under the Label Integrity Program to satisfy us that the description and presentation of wine exported from Australia is appropriate having regard to the requirements of the Act, other Australian laws, and the laws of other countries. In 2018–19, we inspected the records pertaining to approximately 3000 products to verify the accuracy of labelling claims prior to issuing export approval.

44 Export Controls

In 2018–19, Wine Australia issued 19,410 product approvals, approved 55,805 shipments, and issued 54,939 import certificates. At the end of 2018–19 there were 3,577 export licence holders, 2658 of whom exported in 2018–19.

A new system to administer the export controls for Australian wine was advanced in 2018–19 and is expected to be released in 2019–20. The system will manage licensing, product approvals, shipping applications, invoicing, Wine Export Charge declarations and import certification.

Annual analytical survey

Except for a limited number of circumstances, wine sold in Australia or exported from Australia must comply with the Australia New Zealand Food Standards Code (the Code). The Code identifies various limits on wine components, including those arising from the application of permitted agricultural chemicals in the vineyard, and others related to approved winery additives. In 2018–19, we commissioned analysis of 200 samples from a variety of regions to verify compliance with the Code. All 200 wines demonstrated compliance with the Code.

Strategy 2: Protecting the reputation of Australian wine 2018–19 targets 2018–19 achievements Annual analytical survey 200 wines exported from Australia will be analysed to We commissioned analysis of 200 samples from a verify compliance with the compositional parameters of variety of regions to verify compliance with the Code. the Australia New Zealand Food Standards Code. All 200 wines demonstrated compliance with the Code. Label Integrity Program Any minor breaches of the record-keeping requirements We conducted 191 on-site inspections and reviewed of the Wine Australia Act 2013 (the Act) that are the records pertaining to over 3000 products before identified through risk-based inspections are remedied, approving them for export. We suspended one licence while action is initiated in response to serious breaches. and cancelled two. All labelling breaches were remedied. Regulatory services The wine export approval system will be upgraded in a A new system to administer the export controls for major project to ensure ongoing stability of the software Australian wine was advanced in 2018–19 and is expected and technology supporting the system, and to improve to be released in 2019–20. The system will manage the business processes and functionality of the system. licensing, product approvals, shipping applications, invoicing, Wine Export Charge declarations and import certification.

45 Strategy 3: This strategy focusses on the research that will enable the Australian Building Australian grape and wine community to ceaselessly improve quality, a prerequisite of success in the competitive global fine wine market. vine and wine We will do this by providing a deeper knowledge of our customers excellence globally and what influences their purchasing decisions, information on Australia’s unique terroirs and how they influence wine style and quality, by developing digital tools to help growers to produce grapes that meet desired quality targets and by developing measures to assess grape and wine provenance and quality.

During 2018–19 we: • gained an understanding of how chemical measures can estimate a range of grape and wine quality parameters and provenance • provided information from primary research projects on the creation of stronger business relationships across the USA and UK wine value chain, what drives choice in the USA market, who to target and how to sell fine wine in China • provided greater insights on consumers, shoppers and occasions to assist wine producers better target and activate market strategies, and • continued evaluation of digital technologies in a portfolio of projects using sensor technologies to assess disease, nutritional status, grape canopy structure, crop condition, quality and yield.

Grapegrowing for excellence

We provide new approaches and tools from the areas of digital technologies, recognition technologies, robotics and systems engineering to help growers optimise grape production towards desired quality targets, preferred wine styles and premium price points.

During 2018–19 we: • collected another season of data to better understand the different terroirs of Australian Shiraz • developed and released user friendly tools for spatial analysis of vineyards • enhanced the VitiCanopy tool, and • further developed smart spraying equipment.

Wine provenance and measures of quality

We work to develop new measures to assess the provenance and quality of wine and grapes to allow grapegrowers and winemakers to capture, enhance and preserve the influence of terroir.

During 2018–19 we: • collected data on the feasability of using elemental isotope ratios of finished wines to determine origin • identified quality markers for Pinot Noir wines, and • collected metagenomic data describing wild wine fermentation across Australia.

46 Customer insights

We focus on providing pre-competitive insights and research-evidenced tools to enable the Australian grape and wine community to grow demand for Australian wine.

During 2018–19 we: • delivered the Market Explorer, an interactive, on-line tool for current and potential wine exporters to analyse global wine markets based on criteria that are relevant to their business objectives • completed the fourth year of the five-year research project, ‘Barriers in United States trade for developing premium Australian wine sales’ • undertook the annual Australian wine brand health study on 10 key wine markets, including China, the United States and the United Kingdom • provided key market and customer insights through the weekly Market Bulletin and reports via the website • provided presentations at various conferences, workshops and webinars • delivered the USA Wine Marketing Tool as part of the research project, ‘Driving the Strategic Growth of Australian Wines in the USA Export Market’; and • convened a meeting of the Insights Advisory Group (IAG) to facilitate a collaborative approach between Wine Australia and wine producers that will ensure greater alignment in primary consumer research prior to investment.

Strategy 3: Building Australian vine and wine excellence 2018–19 targets 2018–19 achievements Grapegrowing for excellence Data are available on the use of hyperspectral imaging The unexpected retirement of the lead researcher for assessment of vine physiology (nutrition and resulted in this target being re-scheduled to 2019–20. disease). A new research scientist is being recruited to conduct the work. Preliminary data are available. CSA 1601

Results comparing hyperspectral imaging data Hyperspectral scans and fruit composition with physical and chemical data on fruit condition measurements of more than 3000 berries have now (shrivel, disease) and quality (sugar, water, acid and been collected from vines grown in the field and anthocyanin levels). glasshouse. Spectral libraries were built to allow fruit composition predictions to be made from unknown fruit. Total soluble solids, total acidity and pH all showed high predictability on this laboratory-based collection with R2 values above 0.9. Improvements were also made to an algorithm used for discriminating shrivelled berries and produced promising results when assessing proportion of shrivelled berries per bunch. CSA 1602

A user-friendly, open-source software tool is developed, The project produced a suite of freely accessible which outputs to a freeware GIS platform for spatial Precision Agriculture Tools (PAT) for spatial analysis. PAT analysis and experimentation in vineyards. has been developed as a plug-in for QGIS, a freeware geographical information system. Users do not need to have expertise in spatial analysis and geostatistics to use PAT and it is therefore hoped its availability will greatly facilitate adoption of precision viticulture. Instructions for setting up QGIS for PAT are accessible from https://github.com/CSIRO-Precision-Agriculture/ PAT_QGIS_Plugin#precision-agriculture-tools-pat-plugin- for-qgis. CSA 1603

47 Strategy 3: Building Australian vine and wine excellence 2018–19 targets 2018–19 achievements Results are available from a field trial of an on-the-go A $4000 NIR (near infra-red) spectrometer was fitted NIR sensor to characterise fruit composition against above the discharge chute on a machine harvester to maps of yield and remotely sensed vine vigour, to collect spectral data on-the-go during harvest. Maps provide a better understanding of the yield:quality representing the variability in fruit composition across nexus. the vineyard were successfully produced, highlighting the future potential use of this technology by growers. The final project report is available online. CSL 1401

A dataset of grape and wine chemistry analytical results All analysis from the 2018 season is complete and for vintage 2018 and vineyard environment dataset collection and collation of data from 2019 is underway. for 2019 vintage and knowledge on the differences These two data sets will be compared to better and similarities within and between subregions and understand the different terroirs in the Barossa Valley. management practices. UA 1602

An enhanced ‘VitiCanopy’ tool calibrated for different VitiCanopy is now a cloud-based tool and mapping- training systems and vine densities is available for beta enabled visualisation is functional on the app testing. undergoing beta testing and will be transitioned to a web-based platform following sector feedback. UA 1701

A prototype cloud-based tool (‘Vitiweb’) is available with The experimental setup was designed, proximal field the ability to analyse canopy images and aerial images. data was collected, remote sensing platform was introduced, and remote data was collected at multiple Field trials are underway to evaluate a plant sensor- timepoints through the season. Juice/wine chemical based precision irrigation system, to provide new composition analysis was performed, and remote tools for irrigation scheduling based on real-time sensing data was processed to generate maps, which measurements of vine water status. suggest that plant-sensor-based irrigation scheduling could be the preferred approach for high-quality wine production. UA 1705

A report is available on a prototype system for the This project applied rapid digital methods to assess assessment of bunch rot and material other than grapes grape quality on delivery to the winery, in particular (MOG) at the weighbridge, using Vis-NIR hyperspectral Botrytis infection and presence of MOG. Spectral imaging. imaging identified Botrytis infection and MOG, differentiated types of fungal infection and identified grape sunburn and shrivel. The final report will be available on the Wine Australia website. AWR 1601

A PACE (‘pesticide adjusted for canopy environment’) Jointly collected data with Spanish collaborators model for dose adjustment and sensors for spray demonstrated such models for dose adjustment can optimisation are available. work for Australia. Field data are available to compare the performance of Sensor/PACE schemes using vineyard equipment such an intelligent spray system mounted on ground-based as tractors and sprayers were compared against robotic and robotic platforms, on a fully foliated canopy. platforms at two of each vineyard type (wine and table grape) in full-leaf canopy at the two trial sites. Spray drones showed excellent, high coverage (equal to that from ground sprayers) in foliated canopies. Herbicides were able to be sprayed effectively using low heights, slow speeds and coarse sprays. UQ 1601

48 Strategy 3: Building Australian vine and wine excellence 2018–19 targets 2018–19 achievements Wine provenance and measures of quality A detailed statistical analysis of survey data from A dataset comprising 292 Australian wines and Australian and international wines to define the 96 overseas wines showed that application of statistics capability of isotope ratio methodology to differentiate using only the isotope ratios of four elements allowed the origin of wines at a regional and international level. a strong separation of Australian wines from those produced overseas. AWRI 1701-4.4.2

Data on the principal components driving chemical and A number of important aroma volatiles were identified, sensory markers of quality in Pinot Noir. Identification including beta-damascenone, which overall was of ‘end users’ along the provenance value chain consistently higher in concentration in Pinot Noir with capacity to enact change based on principal wines from Oregon, followed by Southern Tasmania. components identified. Tasmanian regions displayed a wide range of values for most parameters measured, likely due to the larger geographical area of these regions, which are sub-GI. The only volatile that separated Burgundy wines from others in the dataset noticeably was hexan-1-ol, associated with perceived ‘greenness’. UT 1503

Report on the ability to characterise provenance of Juice samples (46 Pinot Noir and 49 Chardonnay) spectral fingerprinting data from juice for sparkling wine were sourced from 30 different vineyard blocks across production. the Tamar Valley, Pipers Brook and Coal Valley and analysed using spectral phenolic fingerprinting and basic matrix analysis. There was clear separation according to region. UT 1502

Data available from metagenomic analysis, describing Ferment samples from 2017–18 have been analysed. At wild wine fermentations from across the spectrum of least 53 different fungal genera were detected in these Australian winemaking regions. ferments. Sampling kits were distributed to 32 wineries and samples have been obtained from uninoculated Chardonnay and Shiraz wine fermentations from vintage 2019. AWRI 1701 4.4.2

Knowledge on the key sensory attributes of Barossa Wines from the 2019 vintage have completed Shiraz is obtained. Grape samples from vintage 2019 fermentation and are currently being bottled. Sensory ready for analysis and vintage 2019 trial wines and evaluation is planned for October. UA 1602 unfinished commercial wines ready for bottling. Customer insights Information that will assist exporters in the creation of The results from the project ‘The ties that bind: building stronger business relationships across the USA and UK strong importer and retailer relationships to drive wine value chain. premium wine export sales’ provides key insights on how to establish and maintain a relationship with operators in the USA market. FU 1701

Final project results that inform the Australian wine Report and insights provided on fourth year of Wine community about what drives choice in the US market, Opinions study and Driving the Strategic Growth of and how Australia and our key competitors perform on Australian Wines in the USA Export Market. WOP 1401 these choice factors.

Final research findings that provide information on who Draft report delivered by UniSA – creating opportunity for to target and how to sell fine wine in China. Australian ‘fine’ wine in China. USA 1602

New investments made in key markets and an advisory Insights Advisory Group met to discuss research priorities. board established to improve alignment, awareness and use of primary research and data with sector needs.

49 Priority 2: Increasing competitiveness

Strategy 4: Our focus is on enhancing and building Australia’s competitive edge by Improving resource developing and adopting new and better ways of growing grapes and making wines. Increasing competitiveness is about more than reducing management and costs; it’s about using all of our resources to create and embrace new sustainability opportunities.

Activities in this strategy will continue to provide the sector with the information it needs to manage the challenges of short-term climate cycles and long-term climate change, to ensure that grapevine germplasm resources are preserved through a national collection, to better manage endemic pests and diseases, to maintain freedom from exotic pests and to develop a solution to the wine sector’s information needs around grapes and wine.

During 2018–19 we: • collected, stored and provided the Australian wine sector with data on supply and demand and ensured that the sector has access to key foundation data sets, including a region-by-region survey of vineyard data. • delivered practical vineyard management strategies to deal

with climate change conditions (elevated levels of CO2, elevated temperature) and determined the feasibility of using UAV-assisted technology to inform vineyard decisions in response to extreme weather events. • completed a body of research on the short-term and long-term climate impacts on grape growing in Australia, and improved our understanding of how such climate information can be used to drive vineyard management decisions. • increased preparedness for exotic pest incursions by participating in cross-sectoral projects on pest surveillance, diagnostics and preparing for Xylella fastidiosa. New and improved prevention, detection and management strategies of trunk diseases and endemic species of phylloxera were also provided to the sector. • preserved and managed access to grapevine germplasm resources by sharing knowledge with reference collections held overseas.

Climate adaptability

We provide the sector with information, tools and practical options to manage the challenges of short-term climate cycles and long-term climate change, one of the cross-sectoral RD&E strategies. Our field trials focussed on assessing the impact of likely climate change scenarios and evaluating the utility of adaptation strategies for vineyards.

50 During 2018–19 we: • continued to develop a ‘climate analogue’ tool that compares regions under current and future climates and to assess sensor technology for extreme weather events.

• used four seasons of data to show that elevated CO2 levels in the future will not impact heavily on grape and wine quality and may even enhance yield. Confirming previous studies, research found that warmer temperatures were detrimental to grape and wine composition. • showed that a plant growth regulator can promote better synchronisation as well as delayed grape ripening in the vineyard.

Foundation data

We focus on providing the Australian wine sector with data on supply and demand and ensure that the sector has access to key foundation data sets, including a region-by-region survey of vineyard data.

During 2018–19 we: • delivered the results of the first National Vineyard Scan. It was carried out using a machine learning algorithm developed by Consilium Technology with funding from Wine Australia and other sources. The algorithm scanned more than 5 million hectares of satellite imagery (selected based on the approximate known locations of vineyards) and identified a reported vineyard area of 146,128 hectares with an accuracy of 95 per cent compared with human manual labelling. The results of the National Vineyard Scan go much further than an overall vineyard area figure. The locations of all the vineyard blocks detected have been mapped, providing information that can be used for a range of purposes. Levy payers have free access to the GAIA platform. • conducted and delivered the 2019 National Vintage Survey, which provides crush and pricing information by region and variety. • conducted and delivered the inaugural Cellar Door and Direct to Consumer Survey. • conducted and delivered the 2018 Production, Sales and Inventory Survey.

Sustainable resource management

This stream encompasses natural resource management, economic and environmental sustainability, and social licence to operate.

During 2018–19 we: • continued DNA profiling of Australian grapevine germplasm collections with a view to re-establishing public access to the material in the future and having available data that is comparable to those in international collections.

Biosecurity, pest and disease management

We support improved resource management and sustainability of the sector through better management of pests and diseases. Preparedness for exotic pest threats is improved by a number of new research initiatives.

51 During 2018–19 we: • provided recommendations to update phylloxera disinfestation protocols to regulatory bodies and disseminated this new information to grower groups. • provided training on an integrated phylloxera detection and surveillance method, which can be used in the future to determine area status in Australia. • initiated new projects in the areas of Xylella, diagnostics and in the update of the Viticulture Industry Biosecurity Plan and Manual. • continued research on the detection, susceptibility, incidence and management of trunk disease in grapevines.

Strategy 4: Improving resource management and sustainability 2018–19 targets 2018–19 achievements Climate adaptability

New knowledge shared from four years of data The impact on grapevines of elevated CO2 and increased

collected on the impact of elevated CO2 and increased temperature, alone and in combination, were generally temperature on vine phenology, physiology and overridden by seasonal influences and ‘weather’. resulting wine in Shiraz However, warmer air temperature advanced maturity and resulted in lower quality grapes and wine. Elevated

CO2 levels in future will not impact heavily on grape and wine quality and may even enhance yield. Water use will remain static or diminish marginally. DPI 1202

A field experiment is underway in a commercial setting The plant growth regulator NAA was applied to Cabernet to test treatments using plant growth regulators to Sauvignon vines at various concentrations in the manipulate harvest timing in the three most highly three weeks prior to veraison. The treatments delayed planted cultivars (Shiraz, Cabernet Sauvignon, harvest by between 10 and 21 days and increased the Chardonnay). synchronicity of ripening of berries within a bunch. Progress has also been made towards registration of NAA for use in wine grapes. CSA 1701-2.2

The feasibility of using UAV-based acoustic atmospheric A system to precisely measure and monitor heat tomography methods to inform vineyard processes and frost events in vineyards has been successfully potentially impacted by extreme weather events developed. The pattern and progress of significant (e.g. heat, frost). frost and heat wave events that occurred during 2018 and 2019 were studied using the technology. The data gathered can potentially be used to inform management of these weather extremes. USA 1601

Data on the use of in-canopy misters to mitigate the This project collected two seasons of data on canopy negative effects of heatwaves on grapevine physiology cooling systems for mitigation of heatwaves in and fruit and wine composition, and comparison with a grapevines. Different cooling approaches varied in their passive cooling strategy. effect on vine performance with season, site and cultivar, making general recommendations difficult. However, any cooling approach had positive effects on vines in the warm inland region where the trial was located. UA 1502

Provision of short- and mid-term climate trends to An electronic ‘atlas’, currently being finalised, the sector in an accessible, usable form. Improved is a significant extension output that will deliver understanding of how such climate information can information, tools and practical management options to be used to drive vineyard management decisions in grapegrowers to help them face not only the challenges grapegrowing regions across Australia. of short-term climate cycles, but also long-term climate change. UT 1504

52 Strategy 4: Improving resource management and sustainability 2018–19 targets 2018–19 achievements Foundation data Collect, store and present supply and demand data and Market Explorer tool delivered. insights, including a market attractiveness tool and deep Market insights delivered via 49 weekly Market Bulletins. dive market landscape reports on key markets.

Ensure the sector has access to increasingly granular First National Vineyard Scan was conducted and maps data, including a national scan of vineyard area by prepared for all GI regions. GI region. Sustainable resource management Progress towards the establishment of international A collaborative agreement was established with the collaborative agreements, to facilitate the comparison Spanish group at the Instituto de Ciencias de la Vid y of DNA markers from Australian grapevine germplasm del Vino, which has allowed the initial DNA profiling of with accessions held in relevant overseas reference grapevine varieties in CSIRO, SARDI and other unique collections. Australian germplasm collections. CSP 1501

New research and/or extension activities developed and Following gaps analysis, 38 new projects were developed initiated from examining grapegrowing and winemaking and initiated in 2018–19. These projects span all aspects practices and identifying the gaps in knowledge of grape and wine production and contribute either on innovations to increase economic, social and/or directly or indirectly to increase the sector’s economic, environmental sustainability in the vineyard and/or social and/or environmental sustainability. winery. (See Appendix I. All projects numbered 18XX)

The AWRI library maintains the relevant subscriptions A total of 501 new items were added to the AWRI library’s and resources. collections, including print books, eBooks and reprints. The library continues to subscribe to more than 35 print and online serial publications. A total of 242 full text eBooks were accessed across the library’s 2 eBook platforms. The library responded to 461 queries. Approximately 62 per cent of these related to winemaking, 23 per cent to viticulture and 15 per cent to marketing, health and other topics. These inquiries resulted in the supply of 970 articles, with approximately 33 per cent sourced from the library’s Technical Review collection, 41 per cent from the AWRI publications collection and 26 per cent from the library’s other reprint collections. AWRI 1701-2.2.2

53 Strategy 4: Improving resource management and sustainability 2018–19 targets 2018–19 achievements Biosecurity pest and disease management New activities initiated to prepare the sector for Xylella New initiatives in the area of Xylella preparedness include fastidiosa. the appointment of a Xylella Co-ordinator, jointly funded with Horticulture Innovation, and a cross-sectoral project on potential native insect vectors of Xylella. WA 1812

Endorsement by the SPHD of six new and two updated We are a partner in a new Rural R&D for Profit project on National Diagnostic Protocols for high-priority exotic boosting diagnostic capacity for biosecurity. A key activity pest threats and inclusion of the protocols in a revised in this project will be to endorse and update National Industry Biosecurity Plan for the Viticulture Industry. Diagnostic Protocols for high-priority plant pests.

Updated disinfestation procedures in the National Fermentation treatment as a disinfestation protocol Phylloxera Management Protocol (NPMP). for grape products was validated and the latest disinfestation research communicated through industry bodies and via stakeholder meetings. DED 1701

Information on a grower-friendly, passive and integrated Information and in-field training on an integrated detection and surveillance system for phylloxera. strategy for phylloxera detection and surveillance was delivered to several groups of wine growers, vineyard managers, contractor teams, biosecurity officers and researchers across Victoria and Tasmania. Processes to formally endorse the three methods as sampling protocols in the NPMP have begun. DED 1701

Preliminary data available on the genetic drivers for This project is unravelling the complex relationship fungicide resistance in downy and powdery mildew, between fungicide resistance, fitness, and genetics of and on the link between results in the laboratory and fungal grapevine pathogens using a combination of field efficacy of fungicides in the field. sites, greenhouse experiments and in-vitro testing. The ultimate aim of the work is to use improved knowledge of resistance mechanisms to strategically manage fungicide chemistries in the vineyard. SAR 1701-1.2, AWR 1701-4.5.1

Updated knowledge on effective detection and A LAMP-based detection method for eutypa and management techniques for grapevine trunk diseases botryosphaeria pathogens was developed for field testing (eutypa and botryosphaeria). and information generated on the relative sensitivity of different varieties and rootstocks to grapevine trunk disease. Trunk disease management techniques under evaluation include wound treatment options, pruning timing and watershoot induction during reworking. SAR 1701-1.1

54 Strategy 5: We invested in new or enhanced technologies and processes that Improving vineyard improve vineyard efficiency such as enhanced or new grapevine varieties, clones and rootstocks that produce improved wine flavour performance profiles and tolerated biotic and abiotic stressors and improved yield prediction methods.

During 2018–19 we: • continued field testing of ‘no-spray’, ‘no-prune’ vines, bred for their resistance to mildews and released information to the sector on the field performance of high-density plantings of ‘no-spray’, ‘no-prune’ vines. • developed new grapevine scions and rootstocks and molecular methods and genetic markers for use in plant breeding trials. • used traditional breeding techniques to incorporate genes for fungal disease resistance, salinity, heat and drought tolerance and resistance to phylloxera and root-knot nematodes, and used genetic transformation techniques to test and confirm the role of key resistance genes. • initiated new projects on vine nutrition and cover crops, and evaluated opportunities in the agtech space. • evaluated yield prediction methods.

Enhancing grapevine and rootstock performance

Grapevine breeding programs were augmented with molecular methods in an integrated program to generate enhanced or new varieties and rootstocks with traits such as improved wine flavour profiles and tolerance to biotic and abiotic stresses.

During 2018–19 we: • successfully bred second generation mildew-resistant vines • continued field evaluation of first generation mildew-resistant vines • progressed rootstock breeding programs by identifying markers for nematode and phylloxera resistance and for chloride exclusion, and • continued field evaluation of new rootstocks.

Efficient and sustainable vineyard management

Investments focussed on evaluation of new and improved methods for yield determination, examining the use of undervine cover crops to enhance vineyard performance and investigation of ready-to-use agricultural technologies for the sector.

During 2018–19 we: • initiated new activities on covercrops with focus on soil health • began work to develop a diagnostic mobile app for nutrition, and • continued efforts to identify methods to better predict yield.

55 Strategy 5: Improving vineyard performance 2018–19 targets 2018–19 achievements Enhancing grapevine and rootstock performance Further progress on the breeding of ‘second generation’ Second-generation vines, with additional ‘stacked’ mildew-resistant scions combining additional powdery resistance genes to both powdery mildew and downy mildew and downy mildew resistance genes to further mildew, were successfully bred and planted out in a enhance their durability in the vineyard. small field trial for evaluation. These vines will also be used as the disease-resistant parents for breeding of varieties with desirable consumer traits. CSA 1701-1.1

Genetic markers to enable more rapid screening of The research identified the genetic variation in new scion selections for desirable consumer traits or grapevines that explains some of the difference in the to eliminate those with potentially negative sensory volatile composition of wines related to fruity, green attributes, at the seedling stage. and floral sensory characters. In addition, markers were identified for genes already shown to be important for two wine sensory properties (methoxypyrazines and muscat character) and these will aid the selection of new varieties for specific wine styles. CSA 1701-1.2

Data on yield, vigour, fruit and wine quality from The evaluation of the novel rootstocks continues at four existing rootstock field trials; a prerequisite for various sites, including on grower vineyards. Yield evaluation of suitability for commercial release. component data including cluster and berry number and weight were collected, in addition to fruit quality New work is underway to evaluate selected rootstock parameters such as: sugar content, yeast assimilable genotypes that perform well under reduced irrigation nitrogen, organic acids (malate and tartrate), total conditions. berry anthocyanin and phenolics, pH and titratable acid. In total, 220 new rootstock genotypes were evaluated for the 2018–19 season, and small-scale winemaking was conducted with some of the short-listed candidates. CSA 1701-1.3

Progress towards the identification of genetic markers Markers for three genes that confer resistance to linked to new root-knot nematode- and phylloxera- phylloxera and nematodes were identified. The markers resistance loci, to advance the development of in vitro are now being used to detect superior seedlings in the screening for germplasm with durable resistance at rootstock breeding program. These seedlings will then be moderate to high temperatures. evaluated for resistance to virulent strains of nematodes and phylloxera to validate the marker selection process. CSA 1701-1.3

Progress towards developing rootstocks with enduring Progress has been made on several fronts. A likely resistance to abiotic stressors such as salt, heat mechanism for sodium exclusion in rootstocks has been and drought through the use of gene identification, proposed. In addition, markers that identify genes functional characterisation and marker-assisted responsible for chloride exclusion were validated. These breeding technologies, together with advanced markers are being used to screen numerous rootstock phenotypic screening methods. genotypes for their salt tolerance. Canes of unique American Vitis species were imported and propagated, and are being evaluated for their ability to exclude salt compared to rootstocks readily available in Australia. CSA 1701-1.4

Data from field trials in a ‘no-spray’ vineyard, to The project is comparing the performance of high- and calculate potential cost savings and benefits of ‘standard’-density plantings of different scion-rootstock different treatments. combinations, where the scions are resistant to both downy and powdery mildew. The comparison also includes disease-resistant ‘micro-vines’ planted at high-density. The data from the past year showed that the cost of production ($/tonne) from the high-density ‘no-spray’ plantings was 20% lower than from the standard-density. Significantly, while the micro-vines cropped well, the fruit was susceptible to sunburn due to the vine’s unique canopy architecture, and therefore less fruit was harvested than from wild type vines. CSA 1701-1.5

56 Strategy 5: Improving vineyard performance 2018–19 targets 2018–19 achievements Evaluation of new sensor technology for real-time A new multi-point sensor technology, ‘Proxicrop’, was measurement of vine canopy temperature, to developed to replace the previously tested single-point investigate its potential as a decision-making tool measurement sensor. The potential benefit of Proxicrop to improve irrigation management and water-use is that the sensor array combines a thermal imaging efficiency. sensor with an RGB sensor for real-time, whole-canopy monitoring. Six Proxicrop units were built and deployed in the field to measure vine canopy temperature to determine if this technology is superior to soil moisture sensors for irrigation scheduling. This evaluation is ongoing. CSA 1701-1.5 Efficient and sustainable vineyard management New project initiated examining the use of under-vine The major work this season was the establishment of cover crop plants to reduce the need for herbicide field trials, which included the collection of soil samples sprays, enhance soil moisture retention and nutrient and basic vineyard performance data (yield, fruit cycling, and to maintain, or enhance, grape yields. composition, vine nutrient status, LAI) and botanical surveys to establish species diversity. Soils were analysed for both bacterial/archeal and fungal microbiomes to gain a more complete picture of the microbiome, and will also be tested for mycorrhizal inoculum potential. Differences in soil biodiversity are obvious between vineyard management treatments. UA 1803-1.4

New project initiated to develop a diagnostic mobile Version 1 of the app has been completed and achieved app for vine nutritional disorders. a high prediction of N deficiency. RGB images of old and young leaves were taken regularly to track the progression of nutrient deficiency and toxicity symptoms. The benchmarked dataset was developed through a laboratory ICP nutrient analysis of the petioles with matching symptom severity. The proposed algorithm has been developed to identify specific deficiency and toxicity symptoms through a machine- learning-based training and testing process. CSU 1702-3

New opportunities evaluated in agricultural technology Several new opportunities have been created, including and new investments made as appropriate. the Farmers2Founders program that focuses on developing entrepreneurship and technology capabilities, so producers can solve critical industry challenges. Four grape and wine producers are developing entrepreneurial ideas through this program. F2F 1901

A mobile app, or other user interface, for a new tool The App element of this project has been delayed by to estimate grape yield using weather records and the commercialisation partner and a final report on the historical vineyard data. models developed is being drafted. MQ 1401

A refined yield estimation dataset from trials of The UWB radar sensor demonstrated great promise for ultrawideband radar and 3D stereo imaging, based on counting bunches hidden within the canopy. In a test improvements to image processing software. facility, the sensor was able to detect fewer than 10 berries hidden behind grapevine foliage. Both the UWB radar and RGB video imaging (e.g. Go Pro) methods of yield estimation produced the most encouraging results when the data was analysed with a machine learning approach rather than by conventional mathematical algorithms. CSA 1602

Field data from the third year of trials evaluating This technique’s success in predicting yield is dependent a hand-held NIR (near infrared) device to scan on the quality and depth of the calibration data set. dormant grapevine buds in-situ as input to a new yield Therefore the past year’s focus was to expand the data forecasting model based on bud fruitfulness measures. set that correlates the NIR bud spectral data to potential inflorescence number and size in both Pinot Noir and Chardonnay, and to improve the performance of the hand-held NIR units in the field. UT 1601

57 Strategy 6: We continued to invest in new or enhanced technologies and processes Improving winery that improve winery efficiency and performance.

performance During 2018–19 we: • continued studies to evaluate optimised control strategies and detection methods for Brettanomyces. • delivered extension materials to facilitate roll-out of activity-based costing (ABC) tool and benchmark database to the Australian grape and wine community. • continued work to better understand the nutritional drivers of yeast fermentation performance with data available on the impact of grape juice composition on yeast performance. • continued development of new yeast and bacterial strains with data available from laboratory and pilot-scale trials on performance.

Enhancing yeast and bacterial performance

Continued investment in the area of yeast and bacterial performance produced new hybrid strains, improved our understanding of strain- specific fermentation issues, and produced wines with modified aroma profiles.

During 2018–19 we: • developed a new non-GM yeast that enhances rose aroma in wines • continued work on Brettanomyces to better understand the risks of

development of resistance to SO2, and • continued work to understand drivers of fermentation performance.

Efficient winery production

Improved production methods, including fermentation, water addition and protein stabilisation, were evaluated across a range of projects.

During 2018–19 we: • assessed the impact of water addition on wine quality • evaluated zeolites as an alternative to bentonite, and • developed an activity-based costing tool to evaluate winery efficiency and performance.

Strategy 6: Improving winery performance 2018–19 targets 2018–19 achievements Enhancing yeast and bacterial performance New interspecies hybrids developed to complete hybrid One approach to maximise the possibility for intergenic portfolio. hybridisations involves the use of stable hybrids of Saccharomyces cerevisiae wine strains. Putative hybrids of S. cerevisiae with Lachancea kluyveri have been isolated and are being evaluated. AWRI 1701-3.2.1

Non-GM wine yeast with modified volatile or non-volatile Sensory assessment of the 2018 Chardonnay wines profiles from alterations to amino acid biosynthetic produced using alternative 'rose' aroma yeasts has been pathways. completed. These wines were presented in a workshop at the AWITC and show elevated rose aroma. AWRI 1701 3.2.1

58 Strategy 6: Improving winery performance 2018–19 targets 2018–19 achievements Knowledge of juice or wine compositional factors that Several experiments have been undertaken in which give rise to yeast or bacteria strain-specific fermentation O. oeni was inoculated simultaneously with S. cerevisiae problems. when the concentration of oxygen in the juice approaches saturation. The condition was not conducive to effective implantation of O. oeni and timely malolactic fermentation did not commence. These experiments determined that an optimal timing for MLF may be 24 hours post-inoculation. AWRI 1701-3.2.2

Strains of Brettanomyces isolated, genotyped and Fifty isolates sourced from the sector have been phenotyped for sulfite tolerance, growth rate and screened for growth rate and tolerance to SO2. volatile phenol production. In addition, those strains showing the highest tolerance under screening conditions have had full growth kinetics performed under a variety of SO2 concentrations to confirm their tolerant phenotype. There is evidence of increased resistance to SO2. AWRI 1701-3.4.1

Resources available on the Wine Australia website for A new factsheet ‘Managing the microbiology of winery winery wastewater management. wastewater treatment systems’ drawing on and highlighting the outcomes from the Wine Australia project: Developing a fundamental understanding of the microbiological treatment of winery wastewater. Outcomes from the project reinforced previous material and practices and more detailed information can be found in the operational guidelines for winery wastewater treatment on the Wine Australia website at https://www.wineaustralia.com/growing-making/winery- wastewater-online-resource-kit Efficient winery production Methods to assess and improve the efficiency of A ‘wild’ Chardonnay juice was used to assess the effect fermentation through the use of oxygen during alcoholic of aeration on progress of non-inoculated ferments and and malolactic fermentation. the effect on volatile fermentation products. Ferments (2 L) were aerated at a fixed rate for variable times, have completed fermentation and have been analysed for wine chemistry. AWRI 1701-3.1.5

Data on the impacts of water addition on wine quality The results from the red wine dilution studies to date and style. show that dilution reduced wine colour and tannin in Shiraz, but these parameters remained unchanged in diluted wines prepared from shrivelled Cabernet Sauvignon fruit. AWRI 1701-4.1.1

Novel or more efficient approaches to achieving protein ‘Using zeolites to protein stabilise white wines’ was stabilisation. published demonstrating the high efficacy of this natural porous mineral to remove proteins from wine as an alternative to bentonite. AWRI 1701-3.1.4

Extension materials to facilitate roll-out of Activity-based A final report on this project has been submitted. costing (ABC) tool and benchmark database to the The benchmarking portion of the ABC Tool collects sector, including a guide for undertaking ABC in wineries, anonymous aggregated data to develop an overall short instructional videos/animations on ABC and how benchmark in relation to the size of the winery. As more to use the ABC tool and benchmark database and case wineries use the tool, the benchmarking information will studies demonstrating how wineries have used ABC to continue to improve in accuracy, providing effective benchmark and improve production cost performance benchmarking for year-on-year performance. Promotion and decision making. of the tool will be undertaken over the coming year. 2XE 1501

59 Strategy 7: The international trading environment is becoming increasingly complex Market access and uncertain as trade tensions between major powers threaten existing global trade arrangements. In order to mitigate any impact on the wine sector, Wine Australia continued to pursue its strategy of engagement with key international fora aiming to harmonise or mutually recognise international wine production, labelling and compositional requirements.

Consequently, we worked with our colleagues from the Australian Wine Research Institute and Australian Grape & Wine to ensure the key issues confronting Australian wine exporters were addressed by: • The Federation International du Vin et Spirit (FIVS), the international trade body representing the wine and spirits sector, (Wine Australia co-chairs the market access working group and the technical group advising on the content of the regulatory database) • The World Wine Trade Group, which met twice during the year and is increasingly coordinating wine sector approaches to the World Health Organisation, the World Trade Organisation and to Codex Alimentarius • The International Wine Technical Summit, which met in Livermore, California, at which papers were presented on best practice in measuring sugar in wine, the redundancy of analytical certificates accompanying wine shipments, the process for developing maximum residue limits for agricultural chemicals and on inter-laboratory proficiency testing; and • The APEC Wine Regulatory Forum, which continued to emphasize the need for wine regulations to be proportionate to risk, and for analytical certificates to be required only in response to temporary threats to health. In particular, Wine Australia contributed a presentation arguing that disproportionate regulation of the legitimate wine market may have the unintended consequence of driving further growth in the production and supply of illicit, potentially dangerous, alternatives.

We complement these influences on the international wine regulatory agenda by maintaining comprehensive guides to the technical requirements of 36 major international wine markets. Each of these guides was reviewed during the year, providing an essential reference for the Australian wine exporting community.

60 Strategy 7: Market access 2018–19 targets 2018–19 achievements Market access No new wine production or labelling A bilateral agreement on trade in wine between Australia and the United constraints emerge in existing markets Kingdom was signed and will come into effect when the UK leaves the and conditions in developing markets European Union. converge towards international norms. Wine Australia consulted regularly with trade and regulatory officials in the UK in an attempt to ensure minimal disruption to trade once the UK leaves the European Union. We liaised with regulators in Thailand and Brazil, both directly and through Embassy officials, to mitigate the impact of new analytical certification requirements being introduced in those markets.

No Australian wine shipments are All 36 export market guides were reviewed during the year and updated rejected at the point of import when where necessary. produced, labelled and certified in We were not made aware of the rejection of any products produced in accordance with the advice provided accordance with our advice. in our Export Market Guides.

Completed FTAs are ratified in as The Comprehensive and Progressive Trans Pacific Partnership Agreement short a time as possible, while officials entered into force during the year and includes a specific annex engaged in ongoing negotiations, addressing technical matters of importance to the wine sector. either in bilateral or multilateral We provided assistance to Department of Foreign Affairs and Trade agreements or at the WTO, are officials during their ongoing discussions towards a possible free trade provided with accurate advice agreement with the European Union. regarding market conditions. Advice and information was also provided to officials engaged in the dispute with Canada over wine taxation and marketing arrangements at the World Trade Organisation in Geneva.

Strategy 8: Developing people Building capability We need leaders to pursue our ambitious cross-generational goal of being recognised as the world’s preeminent wine-producing country.

To drive the sector forward and build value through innovation, we invest in developing the leadership capability of those working in the grape and wine community – across the value chain including researchers.

For the broader sector, we work to facilitate collaboration and encourage development of thought leaders, innovators and game changers. The 2019 Future Leaders program started in June and a range of new professional development opportunities to support alumni across all people development programs was developed and implemented including a coaching mastery program.

Research capacity is maintained through continuing to offer support for PhD scholarships and travel bursaries to extend knowledge through global collaboration, and for early career researchers to undertake regionally focussed research.

61 Strategy 8: Building capability 2018–19 targets 2018–19 achievements Developing people At least 15 members of the grape and wine community 15 individuals from across the grape and wine commence leadership and personal development community were selected from over 85 applications to training in 2018–19. participate in Future Leaders 2019. At least 30 members of the alumni will attend a 32 individuals from the Wine Australia leadership professional development masterclass. alumni attended a leadership professional development masterclass. 15 individuals from the alumni are participating in a coaching mastery program as part of Future Leaders 2019.

The capacity of the next generation of researchers is We supported 7 new PhD scholarships and 16 outgoing developed through at least six scholarships for PhD and travel bursaries. Masters study; travel support is extended to at least eight Five early-career researchers were matched and incoming or outgoing scholars; and at least six early- supported to undertake co-funded regionally focused career researchers work with Australia’s wine regions to research projects. lead a co-funded locally-focused research project.

Strategy 9: Wine Australia encourages evidence-based and data-driven decision- Business intelligence making through the collection, presentation and dissemination of global wine sector intelligence. We act as the sector’s information hub, and measurement responding to stakeholder queries in an accurate and timely manner.

In 2018–19, there was a continued focus on market reporting of sales trends across price points, channels, varieties and wine-producing regions. Region-specific and market-specific insight reports were produced and delivered and regular presentations were made to regional associations and more broadly.

The Insights Advisory Group (IAG) met for the second time to facilitate a collaborative approach between Wine Australia and Australian wine producers to help guide investments in market insights.

During 2018–19 we: • provided the sector with a range of supply and demand data and insights to help inform decision making, including the annual National Vintage Report and quarterly Export Reports. • undertook a national scan of Australian vineyards to identify the geolocation of vineyard blocks in Australia and to determine the area of vineyards for each GI region. • created a market explorer tool and developed templates for deep dive market insights reports on key markets to assist wine producers identify opportunities for growth. • delivered regular retail sales trends reports for the USA, the UK and domestic market. • prepared 49 Market Bulletins that are emailed to our subscribers and available on our website.

62 Monitoring and evaluation

Performance evaluation is critical to ensure we are adding value to our levy payers and stakeholders. For us to assess the return on the investments we undertake, we need an evaluation framework. This is true for both RD&E and marketing activities.

In 2018–19, we engaged independent economists to conduct benefit–cost analyses on a range of RD&E activities and the effectiveness of marketing activities was measured using a systematic and consistent approach.

Strategy 9: Business intelligence and measurement 2018–19 targets 2018–19 achievements Business intelligence In-depth market insight reports delivered on China, the Drafts insight reports prepared for China, Australia USA, the UK, Australia and selected emerging markets. and the USA. The UK to be finalised in 2019–20.

Produce, deliver and communicate market-specific Regular market insights provided through the weekly statistics and reports for the sector that guide business Market Bulletin and market-specific reports on the decisions and our investments in marketing and RD&E. website.

Deliver targeted presentations aimed at increasing Presentations provided at various conferences, workshops awareness of the global wine sector information that is and webinars. available. The Market Insights team provided timely and accurate Provide timely and accurate responses to ad hoc questions. responses to questions received via emails and phone-calls.

At least 75 per cent of stakeholders indicate a high level Some 86 per cent of surveyed stakeholders indicated of satisfaction with the services provided across the a high level of satisfaction with the services provided business. across the business.

BCAs indicate at least 75 per cent of programs measured 100 per cent of the programs randomly selected and achieve a positive return on investment. measured achieved a positive return on investment

63 Priorities 1 and 2: Extension and adoption

Strategy 10: To ensure the Australian grape and wine community obtains the full Extension and benefits of its investments, we champion the extension and adoption of R&D outcomes. Our focus is on supporting a clear pathway to market adoption for R&D, from the initial project design to the extension of the results. We use a range of delivery networks, programs and partner with wine sector organisations to disseminate R&D outcomes and encourage the adoption of new technologies and practices. Our Regional Program is a valued vehicle for promoting the adaption of research outcomes and to deliver extension and practical trials that meet regional priorities. We communicate with our many audiences clearly and effectively.

During 2018–19 we: • developed a focused campaign to extend the top 10 new oenological and viticultural practices to the sector • continued to refine our surveys and follow-up sessions to better collect information on the effectiveness of our events and products in encouraging practice change • continued to develop tools and resources to facilitate practice change • maintained our partnership with 11 regional clusters to deliver extension and practical trials that met regional priorities, and • continued to support the AWRI helpdesk to provide a free-of-charge advice service to Australia’s grapegrowers and winemakers who pay the Wine Grapes Levy and/or Grape Research Levy. Advice is available on technical issues from experienced winemakers, viticulturists and scientists.

Strategy 10: Extension and adoption 2018–19 Targets 2018–19 Achievements Extension and adoption R&D project assessment criteria include evaluation of Pathways to extension and adoption were incorporated the extension plan and the likelihood of adoption by levy into the planning and approval process of research payers. projects.

All eleven regional clusters actively participate in The Regional Program delivered over 80 per cent of the delivering activities planned activities across the 11 regional clusters.

At least 85 per cent of survey respondents who attend Over 90 per cent of survey respondents who attended workshops provide an overall rating of at least 4 out of 5. workshops provided an overall rating of at least 4 out of 5 (above average to excellent).

At least 80 per cent of survey respondents indicate that 85 per cent of survey respondents indicated that information provided at workshops is useful in their information provided at workshops is useful. business.

64 Supporting functions

Strategy 11: Corporate affairs Corporate affairs Our corporate affairs function supported transparent and effective and strategy two-way communications with internal and external stakeholders. This included media relations, government relations, corporate planning and reporting, and internal communication.

We maintained strong and productive relationships with all of our stakeholders, including levy payers, Australian Grape & Wine, the Australian Government, state governments, state and regional associations, export partners such as Austrade, sponsors and tourism associations.

The excellence of our communications was recognised by Wine Communicators Australia, with our RD&E News winning the Wine Communicators Australia award for Best Wine Publication (Trade and Technical).

Strategy 11: Corporate affairs and strategy 2018–19 targets 2018–19 achievements Corporate Affairs We increase the readership of our newsletters and During the year, we issued 85 newsletters and bulletins bulletins. and we reached more readers: Our information is available through a range of • weekly Market Bulletin subscriptions rose 37 per cent to channels in a timely manner. 3264 subscribers • monthly RD&E News subscriptions rose 34 per cent to General and specialist media reporting of our key 3673 subscribers messages continues to grow. • monthly Wine Australia news subscriptions rose 51 per cent to 4454 subscribers • monthly Export and Regional Wine Support Package News subscriptions rose 259 to 2154 subscribers • bi-monthly Exporter News subscriptions rose 29 per cent to 7724 subscribers.

Through regular engagement with national, state We meet regularly with our national, state and regional and regional representative bodies we build mutual representative bodies to share information, collaborate awareness and understanding. and add value for our stakeholders.

Through regular communications and engagement, We communicate timely information so that people know we build awareness of our priorities, activities and how Wine Australia can help them to do better business. achievements. Three quarters of our stakeholders (74 per cent) believe that the amount of contact they receive from Wine Australia is about right.

65 Strategy 12: Finance and administration Corporate services The finance and administration team focussed on providing the business with timely and accurate reporting to enable effective decision making, financial management and budgetary control.

People and culture

Wine Australia’s focus is still firmly set on fostering a high-performance culture. We want our people to realise their full potential. All 100 employees underwent a performance review in Feb/March 2019 where they were given feedback on their performance and agreed their key performance indicators. Each staff member also agreed on a Development Plan that will help them achieve their individual and business objectives. Wine Australia invested over $265,000 on staff training and development in 2018–19.

More than twenty employees were recruited across our global operations in 2018–19. We have robust recruitment practices in place to ensure we choose the right person to match our business needs.

We have introduced Employee Handbooks in each of our office locations, which ensure we comply with local and international employment legal requirements and staff adhere to our human resources policies.

Information communication technology

Our fit-for-purpose ICT continued to support our team by giving our people the necessary tools to deliver.

During 2018–19, we built upon the IT reliability focus of 2017–18. We completed an upgrade of the corporate WiFi and firewall solutions and reviewed and enhanced our backup processes and tools across all sites. In the Sydney and Shanghai offices IT was upgraded to align with the Adelaide office, and we commenced planning for upgrading the San Francisco office in July. We also had a significant focus on IT security, undertaking an external IT security review, implementing new IT security policies and developing a training and awareness program.

The Wine Export Approval system replacement project ramped up significantly during the year, with most of the functionality delivered and end-to-end testing commenced.

Other major new developments included the Market Explorer online market analysis tool and the national vineyard scan as part of the VinSites project.

A comprehensive IT project roadmap has been developed, following extensive consultation with each department, to deliver future IT needs commencing in 2019–20.

66 Strategy 12: Corporate services 2018–19 targets 2018–19 achievements Finance and administration All contracts are paid as and when due. All payments made in accordance with payment terms.

External audit reports 100 per cent adherence to Reserves policy adhered to for the 2018–19 financial year. Reserves policy.

External audit reports 100 per cent maintenance of the Balance of reserves at 30 June 2019 of $16 million were reserve of $3 million. higher than the $3 million minimum requirement.

Externally provided services, events and activities meet We procured goods and services in such a way that met our commercial needs. our commercial needs, complied with our procurement policy, and accorded with the Commonwealth Procurement Rules.

Annual briefing for staff on finance policy and We introduced a new Policy Governance and Probity procedures. Application of the policy and procedures Framework and maintained an appropriate level of risk mitigates risk of non-compliance. management and oversight in accordance with our Risk Management Plan People and culture Employee Engagement survey is undertaken and An Employee Engagement Survey was completed in results communicated to all staff. Opportunities for September 2018 and the results were communicated improvement are recommended to the Leadership Team. to all staff. The Leadership Team analysed the results, which were overall very positive, and decided to focus on leadership, feedback and recognition, training and development and communication and collaboration to make Wine Australia an even better place to work.

Each team member has a personal development plan. Each staff member had a performance review with Managers review implementation of plans with team their manager in Feb/March 2019 and agreed on a members. development plan that would help the individual and the business achieve its objectives.

Each team member complies with HR policies and Employee Handbooks were implemented in each of our procedures. Any issues of non-compliance are managed office locations, so each staff member is aware and in a timely and effective manner. adheres to our HR policies and procedures. Any issues of non-compliance are dealt with by the employee’s manager and HR Manager in a timely and effective manner. Information communication technology Our external and internal stakeholders are able to Unplanned outages affected IT availability less than access our systems to support their business. 1 per cent of the time. The outage assessment includes the period when roadworks cut the communications cable to the Adelaide office disrupting internet access for 24 hours. There were planned outages for scheduled upgrades, but these were timed to minimise business impacts.

67 68 The organisation

70 Organisational structure and statement on governance 70–78 The Board 79–81 Board Committees 81 Geographical Indications Committee 81 Legislative Review Committee 82–84 Management and staff 85–87 Other reporting requirements

69 Organisational structure and statement on governance

As a corporate Commonwealth entity, Wine Australia is bound by both its enabling legislation, the Wine Australia Act 2013, and by the PGPA Act and Rules. We are also party to a funding agreement with the Commonwealth of Australia, represented by the Department of Agriculture, which prescribes various corporate governance methods and reporting. We have met all requirements of the Funding Agreement in 2018–19.

The Board is the authority accountable for Wine Australia. It is accountable to the Australian Parliament through the Minister for Agriculture.

In Australia, our head office is in Adelaide and we also have an office in Sydney. Overseas, we have subsidiary corporate bodies in London, Shanghai, Vancouver and San Francisco that facilitate our global marketing activities.

We are committed to using and managing resources, information and our powers in an efficient, responsible and justifiable manner through implementation of risk management standards and practices. We ensure decisions have regard for the wellbeing of people and the environment, both now and for the future, and strive to maximise return on investment of sector and public funds invested through us. We have robust internal accountability mechanisms that allow us to readily measure and review performance against well-considered objectives and seek to continuously improve our performance in light of such reviews.

The Board The Board is established and governed under the Wine Australia Act 2013. It must consist of a Chair and at least five, but not more than seven, other Directors. The current Chair will conclude his term on 30 September 2019. The current Board other than the Chair has been appointed for a three-year term that ends 30 September 2021.

Five board members completed their terms on 30 September 2018, two board members were reappointed for an additional term and five new board members were appointed by the then Minister for Agriculture and Water Resources the Hon. David Littleproud, after an extensive recruitment process lead by Presiding Member Peter Hayes.

Resolutions by the Board are made in respect of all contractual commitments exceeding $500,000.

70 Board members Mr Brian Walsh (SA) Chair from 1 July 2014

Brian lives in the Barossa, working as a wine sector consultant since 2013 following a 24-year career at Yalumba.

He began at Yalumba in 1988 as Chief Winemaker, later joining the Board as Director of Wine, before becoming Director of Strategy and Business Development. His early career was in McLaren Vale working in various winemaking and management positions over a 20-year period.

Brian has held numerous wine sector roles, including President of the South Australian Wine Industry Association, Chair of the South Australian Wine Tourism Advisory Board, Chair of Barossa Winemakers Committee, Chair of the Wine Innovation Cluster and Independent Chair of Riverland Wine.

As a strong supporter of the Australian wine show system, Brian has been both Chairman of Judges at the Royal Adelaide Wine Show and Chair of its Wine Committee.

Dr Michele Allan (Victoria) Deputy Chair as appointed by the Board from 23 November 2018. Director from 1 October 2018

Michele is currently Chair of the Boards of Apple and Pear Australia Limited, Charles Sturt University and Meat & Livestock Australia. She is a non-executive director of Wine Australia, CSIRO, Food and Agribusiness Growth Centre, CRC Food Agility, Nuffield Australia, Dairy Food Safety Victoria and Grain Growers Limited.

Her prior board roles include Tasmanian Irrigation, Innovation and Science Australia, Grape and Wine Research and Development Corporation, Forest and Wood Products Australia, William Angliss Institute, Callaghan Innovation (NZ) and Food Standards Australia and New Zealand. Michele held executive roles with Amcor Limited, Kraft Foods, Bonlac Foods Limited, ICI, Tasmanian Bioinformatics Centre of Excellence Tasmania, Johnson and Johnson and Nestle.

Michele has a Bachelor of Applied Science from University of Technology Sydney, Master of Management of Technology from Melbourne University, Master Commercial Law Deakin University and Doctorate from RMIT. She is a fellow of the Australian Institute of Company Directors and a Fellow of Australian Academy of Technology and Engineering.

Michele chairs the Audit Committee.

71 Ms Catherine Cooper (SA) Director from 1 October 2018

Catherine is an experienced non-Executive Director having served on approximately 50 boards. After a professional career as a commercial lawyer, Catherine moved into the business world and developed wide knowledge and experience across a broad range of sectors such as agribusiness, food and health, energy, water, science and technology.

Catherine has been involved in start-ups, small to medium enterprises, public and private sectors, Australian Stock Exchange-listed (ASX), and not-for-profit organisations on a national and international basis. Career highlights include the establishment of national joint venture, Rural Bank, being a Telstra Business Woman of the Year finalist – twice, inclusion in an international management program at GE and winning a position in the Australian Institute of Company Director’s ASX Top 200 Chairman’s Mentoring Program. Catherine is an experienced Audit Committee Chair and is a Fellow of the Australian Institute of Company Directors.

Among other directorships Catherine has been Presiding Member of the South Australian Environmental Protection Authority since June 2018 and is a Director of Australian Eggs, a member owned not-for-profit company providing marketing and research and development services for Australian egg farmers. She also serves on the Board of ASX-listed Beston Global Food Company.

Catherine chairs the Remuneration Committee

Mr Brian Croser AO (SA) Deputy Chair as appointed by the Board to 23 November 2018 Director from 1 October 2015

Brian began his career as a winemaker with Thomas Hardy and Sons in 1969.

In the early 70s Brian studied for a Masters from The University of California at Davis and went on to establish the Wine Science program at Charles Sturt University.

By 1976 Brian had established Petaluma and in 1978 gave it a home in the Piccadilly Valley; and in 1986 established Argyle winery in Oregon (US).

Brian served as Chairman of the Adelaide, Canberra, Sydney and Perth wine shows and twice as President of WFA. For his service to Australian wine he was awarded an Order of Australia, the Maurice O’Shea award and was the Decanter Man of the Year in 2004.

Brian was Deputy Chancellor of the University of Adelaide from 1999 to 2007 and was made a Doctor of the University for his service, having received a similar honour from Charles Sturt University.

Brian still lives at the Tiers Vineyard in Piccadilly Valley and is the winemaker for Tapanappa and Tunkalilla Vineyard in Oregon.

72 Professor Peter Høj AC (Qld) Director from 1 October 2018

Peter has been Vice-Chancellor and President of The University of Queensland since 2012. He was previously Vice-Chancellor and President of the University of South Australia (2007–12), Chief Executive Officer of the Australian Research Council (2004–07) and Managing Director of The Australian Wine Research Institute (1997–2004).

He was educated at the University of Copenhagen, majoring in biochemistry and chemistry, and has a Master of Science degree in biochemistry and genetics, a PhD in photosynthesis and Honorary Doctorates from the Universities of Copenhagen, Adelaide and South Australia.

Peter is a Director of the Board of Group of Eight (Go8) Universities (and in 2017 was the Chair) and a member of the Australian Medical Research Advisory Board.

He served on the CSIRO Board 2011–14 and was member of the Prime Minister’s Science Engineering and Innovation Council 1999–2004 and 2006–07.

He is a Companion of the Order of Australia, a Fellow of the Australian Academy of Technological Sciences and Engineering, a Fellow of the National Academy of Inventors, a Foreign Member of The Royal Danish Academy of Sciences and Letters and was awarded an Australian Government Centenary Medal for service to Australia through wine research and science.

Peter chairs the RD&E Committee.

Ms Cath Oates (WA) Director from 1 October 2018

Cath’s international winemaking career began after studying business and viticulture at Curtin University followed by oenology at University of Adelaide. Senior industry roles have included Group Winemaker at Mud House Wine Group (NZ) and Chief Winemaker at Plantagenet Estate.

Cath is currently Vice Chair of Wines of Western Australia and has previously served as President of Great Southern Wine Producers Association and Margaret River Wine Association. During her time in New Zealand she also served as the winemaking representative on the Advisory Board of Sustainable Winegrowing New Zealand.

A keen wine show judge, Cath has judged extensively both in Australia and overseas and is graduate of the Len Evans Tutorial. Currently Cath is the owner of Oates Ends, making wines from the vineyard on the intergenerational farming property in Margaret River. Cath also runs a consultancy business providing strategic winemaking services and wine education.

73 Dr Mary Retallack (SA) Director from 1 October 2015

Mary is an experienced director, agricultural scientist and third-generation viticulturist who brings a wide range of skills and experience from practical, research, extension and consultancy roles in the global wine sector over the past 25 years. She is currently Managing Director of Retallack Viticulture Pty Ltd, which offers viticultural and agribusiness consulting services throughout Australia and is recognised internationally as a Certified Practicing Agriculturist. Mary has tertiary qualifications in conservation and park management, natural resource management, education, arbitration and viticulture. She also holds a PhD in viticulture and plant protection.

She is a member of the International Organisation of Vine and Wine (OIV) Viticulture Commission, and ENVIRO group, a member of the Food Agility CRC, Strategic Investment Council, AgriFutures™ Rural Women’s Award Alumni Advisory Panel, Adelaide University Wine Alumni Steering Group, and the Australian and New Zealand Grapegrower and Winemaker editorial panel.

She is a graduate of the Australian Institute of Company Directors course, a Fellow of the Australian Rural Leadership Foundation, a Future Leaders graduate, a past Non-Executive Director of the Australian Grape and Wine Authority, Australian Wine Research Institute, Wine Communicators of Australia, and Grape and Wine Research and Development Corporation.

Mary’s leadership capabilities and excellence in science have been acknowledged via the RIRDC Rural Woman of the Year (national winner), as a 100 Women in Australian Agribusiness inductee, a Len Evans Tutorial Scholar, a PIRSA Women influencing agribusiness and regions ambassador, and a Businesswomen’s Hall of Fame inductee.

74 Mitchell Taylor (NSW) Director from 1 October 2018

Mitchell Taylor is third-generation Managing Director and winemaker for Clare Valley family-winery Taylors Wines. Mitchell worked in finance and stockbroking in both London and Sydney before joining Taylors Wines in 1988 and later becoming the Managing Director in 2000.

Mitchell currently oversees all aspects of the business. As an experienced winemaker, Mitchell maintains a very hands-on role at the winery, supervising all winemaking activities to ensure the quality and consistency of all Taylors wine is maintained.

His commitment to the Australian wine industry extends to involvement in key industry associations, including his role as a founding and current director of Australia’s First Families of Wine, Director of The Drinks Association and a member of the Wine Australia Marketing Advisory Group. Previous roles include former Director and Vice President of the Winemakers’ Federation of Australia, Chairman of the National Wine Foundation, Chairman and Vice-Chairman of Alcohol Beverages Australia, and a Founding and Past Chairman of YPO Sydney.

Mitchell is a Fellow of the Australian Institute of Company Directors.

Mitchell chairs the Marketing Committee.

Outgoing board Ms Eliza Brown (Vic.) members Director from 1 October 2015 to 30 September 2018

Eliza is from a fourth-generation wine family from Victoria, Australia. She studied advertising/business at RMIT University and went onto account management at some of Melbourne’s leading agencies, including international advertising firm J. Walter Thompson.

Eliza never looked back, deciding to join her father at All Saints Estate and St Leonards Vineyard in Wahgunyah, Victoria where she could use her honed marketing skills.

Eliza is the CEO/Director with her siblings, Angela and Nick, of All Saints Estate, St Leonards Vineyard and Mount Ophir Estate.

She also is the first female director of Brown Brothers wines, where she is also a shareholder. With a keen interest in rural issues, she was formerly a member of the Agricultural Industry Advisory Council.

Eliza believes a keen interest in changing consumer taste preferences and fashion trends is essential to be at the forefront of the wine industry.

75 Mr David Dearie (Vic.) Director from 1 October 2015 to 30 September 2018

David brings a wealth of global wine and business experience to Wine Australia, having lived and worked in 8 countries across 4 continents over the past 30 years.

David’s career has seen him take on leadership roles at organisations including Treasury Wine Estates (TWE) and Brown-Forman, where he oversaw large-scale business restructuring for sustainable growth, organisational culture change, the building of market share, and the identification of new and emerging markets.

From 2009–2013, David was head of the wine business now known as TWE, overseeing the de-merger of the business from Fosters Group Limited and the listing of TWE on the stock exchange in 2011.

Prior to this, David spent more than a decade at Brown-Forman holding a number of roles including Managing Director of Brown- Forman Beverages for Western Europe and Africa, and President and COO of Brown-Forman Wine Group.

Currently, David is Managing Director of Eastwind Consulting providing strategic, brand and financial advice for clients in the wine and spirits sector.

Mr Edouard Peter (SA) Director from 1 October 2015 to 30 September 2018

Edouard is an investment banker who has worked for some of the world’s biggest financial institutions. Ed is the cornerstone investor, majority shareholder and founder of Dural Wines, with approximately 350 acres under vine.

Dural is a controlling shareholder of Kaesler Wines (Barossa Valley), the Clare Valley Wine Company (Clare Valley), Naswauk Wines (McLaren Vale) and Yarra Yering and Warramate (Yarra Valley).

Over the past four years, Ed has created and is the largest shareholder of Duxton Vineyards. Duxton Vineyards produces approximately five per cent of Australia’s wine grapes, and its sister company Duxton Dried Fruit is one of Australia’s largest sultana producers.

Since the founding of Duxton Capital in 2009, he has been the group Chairman. Duxton manages or advises on more than a billion dollars of investments including more than 20 agricultural projects.

In 2014, Ed created Duxton Capital Australia and today Duxton has nine projects in Australia across cattle, dairy, fruit, grain, cotton and wine. Ed and his wife are also investors in the South Australian hospitality sector with interests in the Crafers Hotel, Uraidla Pub, Stanley Bridge Hotel, and 2KW in Adelaide.

76 Mr Keith Todd (SA) Director from 1 October 2015 to 30 September 2018

In a career spanning more than 20 years, Keith has extensive global experience in food, beverage and agricultural processing, serving as Chief Operating Officer and GM Global Operations at Accolade Wines, from October 2013 to February 2019. In these roles Keith was responsible for overseeing all of Accolade’s wine sourcing, wine production and wine packaging activities in Australia, the UK, North America, South Africa and New Zealand.

A qualified mechanical engineer, prior to Accolade Wines, Keith spent 12 years at Graincorp Malt, 5 of those in the position of Director of Operations and Engineering where he was responsible for the production and operations of Graincorp Malt’s North American facilities.

Keith delivered in-depth knowledge of business strategy planning and implementation from the perspective of Australian wine and grape operations and supply chain economics.

Mr Kim Williams AM (NSW) Director from 1 October 2015 to 30 September 2018

Kim has held many senior executive roles in the entertainment and media industries, including as Chief Executive at each of News Corp Australia, FOXTEL, Fox Studios Australia, the Australian Film Commission, Southern Star Entertainment and Musica Viva Australia.

He is Chair of the Copyright Agency and previously served as foundation Chairman of the Australian Film Finance Corporation, Chairman of the Sydney Symphony Orchestra and of Musica Viva Australia, and Chairman of the Sydney Opera House Trust from 2005 until 2013.

He is the current Chair of Thomson Reuters Founders Share Company and a board member of a variety of commercial and not for profit enterprises. He has been a commissioner of the Australian Football League since 2014.

Kim was appointed a Member in the Order of Australia in June 2006 for his services to the arts and public policy formulation in the film and television industries. In October 2009, he was awarded a Doctorate of Letters (Honoris Causa) by Macquarie University for his contribution to the arts and entertainment industry in Australia and internationally.

77 Table 11: Wine Australia Board meetings 2018–19 Date held Location 18 September 2018 Adelaide SA

23 November 2018 Adelaide SA

15 February 2019 Hobart, Tas

26 April 2019 Adelaide, SA

18 June 2019 Canberra, ACT

Education and The Chair meets periodically and confidentially with each Director of performance the Board to discuss their performance over the previous 12 months and to agree on any action that may be taken to enable that Director to review of Directors better fulfil their duties.

If at any time during the year the Chair has reason to be concerned about the performance of a Director, they will discuss the matter confidentially with the Director concerned. If that concern is unlikely to be remedied, they will report the matter to the responsible Minister and recommend a course of action.

If the Chair becomes aware that a Director has committed a breach of subsection 20(4) of the Wine Australia Act or has contravened Subdivision A of the PGPA Act in relation to the Authority, the Chair must immediately report the matter to the responsible Minister.

Board Directors acknowledge that in accordance with section 30 of the PGPA Act, only the responsible Minister has the power to terminate the appointment of a Director and, in doing so, the Minister must adhere to the requirements set out in section 30(2) of the PGPA Act that include providing the Director with a statement of reasons for the termination that must be tabled before each House of Parliament within 15 sitting days of that House after the day the responsible Minister gives the notice to the Director.

In the event that the Chair makes a report to the responsible Minister about the performance of any Director, they will, at the earliest opportunity, advise the Director concerned of the report and the reasons for the report.

Periodically, the Deputy Chair meets with the Chair to discuss the Chair’s performance over the previous 12 months; and to advise the Chair on any action that may be taken to enable the Chair to better fulfil their duties.

78 Board committees

Audit Subsection 45(1) of the PGPA Act requires authorities accountable Committee for all Commonwealth entities to ensure that the entity has an Audit Committee.

In 2018–19, the Audit Committee from 1 July 2018 to 30 September 2018 comprised: • Keith Todd (Chair) • Edouard Peter (Deputy Chair), and • Mary Retallack.

From 23 November 2018, the Audit Committee comprised: • Dr Michele Allan (Chair) • Catherine Cooper, and • Mitchell Taylor.

The objective of the Audit Committee is to ensure: • compliance with statutory obligations in respect to audit and financial matters • the integrity of financial reporting • the implementation of sound systems of internal control and risk management, and • the maintenance of high standards of governance and fiscal responsibility.

Marketing From 1 July 2018 to 30 September 2018, the Marketing Committee Committee comprised: • David Dearie (Chair) • Eliza Brown • Kim Williams AM • Brian Walsh, and • Edouard Peter.

From 23 November 2018, the Marketing Committee comprised: • Mitchell Taylor (Chair) • Brian Croser AO • Catherine Oates, and • Brian Walsh.

The objective of the Marketing Committee is to advise on the directional strategies and priorities of marketing activities by: • providing input that assists in determining the long-term marketing needs for the Australian wine sector • providing input that assists with the development of the marketing strategic plan, including advice on investment priorities • using market intelligence, identify areas in which new growth opportunities exist for the Australian wine sector, and • advocating for various marketing opportunities that encourage sustained growth of the Australian wine sector. 79 Remuneration From 1 July 2018 to 30 September 2018, the Remuneration Committee Committee comprised: • Brian Walsh (Chair), and • Brian Croser AO.

From 23 November 2018, the Remuneration Committee comprised: • Catherine Cooper (Chair), and • Brian Walsh.

The objective of the Remuneration Committee is to ensure the appropriate oversight and approval of human resources and remuneration policies and practices. In particular, the Remuneration Committee makes recommendations on: • the oversight of organisational design and human capability of Wine Australia commensurate and consistent with its strategic goals including: −− its recruitment strategies and practices −− the identification of talent including training and development −− retention and success, and −− diversity. • the behavioural and cultural framework, and practices of Wine Australia • the human resources and remuneration strategies, policies and practices of Wine Australia • the remuneration framework for all employees, and • performance management practices and outcomes.

Research, From 1 July 2018 to 30 September 2018, the Research, Development and Development and Extension Committee comprised: • Brian Croser AO (Chair), Extension Committee • Mary Retallack (Deputy Chair); and • Brian Walsh.

From 23 November 2018, the Research, Development and Extension Committee comprised: • Prof. Peter Høj AC (Chair) • Dr Michele Allan • Brian Croser AO, and • Dr Mary Retallack.

The objectives of the Research, Development & Extension (RD&E) Committee are to provide advice to Wine Australia on the appropriate investment of the Grape Research Levy and the research and development component of the Wine Grapes Levy in research and development in accordance with the Wine Australia Act 2013 by: • providing input that assists Wine Australia in determining the long- term RD&E needs of the Australian wine sector • providing input that assists with the development of the strategic plan of Wine Australia including advice on research and development investment priorities and the assessment of their progress, and • advocating for RD&E opportunities that encourage sustained growth of the Australian wine sector.

80 Table 12: Attendance at Board and committee meetings 2018–19 Board Audit Marketing Remuneration RD&E meetings Committee Committee Committee Committee Eligible Attended Eligible Attended Eligible Attended Eligible Attended Eligible Attended

Brian Walsh 5 5 4 4 1 1 Dr Michele Allan 4 4 3 3 3 2 Eliza Brown 1 1 1 1 Catherine Cooper 4 4 3 3 1 1 Brian Croser AO 5 5 3 3 3 3 David Dearie 1 1 1 1 Prof. Peter Høj AC 4 4 3 3 Catherine Oates 4 4 3 3 Edouard Peter 1 1 1 1 1 1 Dr Mary Retallack 5 5 1 1 3 3 Mitchell Taylor 4 4 3 2 3 3 Keith Todd 1 1 1 1 Kim Williams AM 1 1 1 1 Geographical Indications Committee

The Wine Australia Act 2013 establishes a Geographical Indications Committee (GIC) with its primary role being consideration of applications for new Australian and foreign GIs. The GIC comprises members appointed by Wine Australia, including one member nominated by WFA and one nominated by AV (now AG&W).

In 2018–19, the GIC comprised: • Dennis Mutton, the Presiding Member appointed by Wine Australia • Phillip Laffer, WFA’s nominated member, and • Peter Hayes, AV’s nominated member.

The GIC did not make any determinations of new geographical indications for wine in 2018–19.

The GIC considered an application for the determination of Wilyabrup as a geographical indication for wine but did not decide whether to make the determination. Rather, it requested further information from the applicants.

On 23 November 2018, the GIC made a final determination of the European Geographical Indication Avola. Following an objection period during which no objections were raised, on 18 January 2019, Avola was entered onto the Register of Protected Geographical Indications and Other Terms. Legislative Review Committee Wine Australia’s Legislative Review Committee (LRC) did not meet in 2018–19. 81 Management and staff

Senior management

Andreas Clark Chief Executive Officer

Peter Stuart Kate Brett Rachel Dr Liz Steven Bailey Barclay Harvey Murphy Triggs Waters Weinert Manager, General General General General General General Market Manager, Manager, Manager, Counsel Manager, Manager, Insights Marketing Corporate ERWSP & IT RD&E Corporate Affairs and Services Strategy

Table 13: Key Management Personnel remuneration 2018–19

Post Termin- Total Key Management employ- Other long- Short-term benefits ation remuner- Personnel remuneration ment term benefits benefits ation benefits

Name Position title Base salary Bonuses Other benefits and allowances Superannuation contributions Service Long Leave Other long-term benefits Termination benefits Total remuneration Clark, Andreas Chief Executive 305,402 - 78,327 71,100 8,012 - - 462,842 Officer (CEO)

Barclay, Stuart General 303,148 - 6,053 28,228 7,956 - - 345,386 Manager (GM)

Weinert, Steven General 244,031 - 6,358 22,827 6,396 - - 279,612 Manager (GM)

Waters, Elizabeth General 206,291 - 4,463 18,761 5,631 - - 235,145 Manager (GM)

Walsh, Brian Board member 76,090 - 3,414 7,229 - - - 86,732

Retallack, Mary Board member 38,050 - 388 3,615 - - - 42,053

Croser, Brian Board member 38,050 - - 3,615 - - - 41,665

Oates, Catherine Board member 28,537 - 715 2,711 - - - 31,964

Allan, Michele Board member 28,537 - - 2,711 - - - 31,249

Cooper, Catherine Board member 28,537 - - 2,711 - - - 31,249

Høj, Peter Board member 28,537 - - 2,711 - - - 31,249

82 Table 13: Key Management Personnel remuneration 2018–19 (continued)

Post Termin- Total Key Management employ- Other long- Short-term benefits ation remuner- Personnel remuneration ment term benefits benefits ation benefits

Name Position title Base salary Bonuses Other benefits and allowances Superannuation contributions Service Long Leave Other long-term benefits Termination benefits Total remuneration Taylor, Mitchell Board member 28,537 - - 2,711 - - - 31,249

Brown, Eliza Board member 9,512 - - 904 - - - 10,416

Dearie, David Board member 9,512 - - 904 - - - 10,416

Peter, Edouard Board member 9,512 - - 904 - - - 10,416

Todd, Keith Board member 9,512 - - 904 - - - 10,416

Williams, Board member 9,512 - - 904 - - - 10,416 Kimberley

17 1,401,312 - 99,719 173,448 27,995 - - 1,702,474

Table 14: Senior executives remuneration 2018–19

Post Other Termin- Total Senior executives employ- Short-term benefits long-term ation remuner- remuneration ment benefits benefits ation benefits

Number Total remuneration of senior Average Average base salary bonuses Average Average other benefits and allowances Average superannuation contributions Average Leave long Service other Average benefits long-term termination Average benefits total Average bands executives remuneration $0 - $220,000 2 168,724 - 6,626 15,798 5,560 - - 196,708

$220,001 - $245,000 2 196,077 - 4,713 26,900 5,492 - - 233,182

83 Table 15: Other highly paid staff remuneration 2018–19

Post Other Termin- Total Other highly paid employ- Short-term benefits long-term ation remuner- staff remuneration ment benefits benefits ation benefits

Number of Total remuneration other highly

bands paid staff Average base salary bonuses Average Average other benefits and allowances Average superannuation contributions Average Leave long Service other Average benefits long-term termination Average benefits total Average remuneration $220,001 - $245,000 1 219,928 - 13,243 2,012 - - - 235,182

$270,001 - $295,000 1 263,928 - 24,368 5,556 - - - 293,851

$295,001 - $320,000 1 291,232 - 6,142 - - - - 297,374

Staff Wine Australia employed 99 people at 30 June 2019, compared with 89 the preceding year. The additional roles are related to the implementation of the $50m Package and are contract-based to reflect the duration of the additional funding.

Table 16: Staff members by location

Male Female Intersex and unspecified Total Full time Part time Full time Part time Full time Part time

Australia 16 1 41 18 0 0 76

UK 0 0 5 2 0 0 7

US 3 0 5 1 0 0 9

Canada 0 0 2 0 0 0 2

China 2 0 3 0 0 0 5

Total 21 1 56 21 0 0 99

Work health We are committed to providing a safe and pleasant work environment and safety for both staff and visitors and acknowledge our responsibilities under the Work Health and Safety Act 2011. We updated our Work Health and Safety Policy, which includes detailed guidelines on incident reporting and emergency procedures. There were no notifiable incidents or injuries. There were no investigations conducted.

84 Other reporting requirements

Enabling legislation The Australian Grape and Wine Authority was established by section 6 of the Australian Grape and Wine Authority Act 2013 and continues in existence by force of section 6 of the Wine Australia Act 2013 as a body corporate, under the name Wine Australia.

Functions

Section 7 of the Act provides that Wine Australia has the following functions: a) to investigate and evaluate the requirements for grape or wine R&D b) to coordinate or fund the carrying out of grape or wine R&D activities c) to: i. monitor ii. evaluate, and iii. report to the Parliament, the Minister and the representative organisations on grape or wine R&D activities that are coordinated or funded, wholly or partly, by the Authority;

d) to: i. assess, and ii. report to the Parliament, the Minister and the representative organisations on the impact, on the grape industry or wine industry, of grape or wine R&D activities that are coordinated or funded, wholly or partly, by the Wine Australia

ea) to implement, facilitate and administer programs, as directed by the Minister, in relation to: i. wine, and ii. cider (as defined by section 33–1 of the A New Tax System (Wine Equalisation Tax) Act 1999), and iii. international wine tourism, and services, products and experiences that complement international wine tourism

eb) to administer grant programs in relation to wine (as defined by section 33–1 of the A New Tax System (Wine Equalisation Tax) Act 1999), as directed by the Minister e) to facilitate the dissemination, adoption and commercialisation of the results of grape or wine R&D f) to control the export of grape products from Australia g) to promote the consumption and sale of grape products, both in Australia and overseas h) such other functions as are conferred on the Authority by: i. this Act ii. the regulations, or iii. any other law i) to do anything incidental to, or conducive to, the performance of any of the above functions.

85 Objects

The objects of the Act are: a) to support grape or wine R&D activities aa) to support the growth of the wine industry, and other industries that make wine (within the meaning of section 33-1 of the A New Tax System (Wine Equalisation Tax) Act 1999) ab) to support the growth of international wine tourism, and services, products and experiences b) to control the export of grape products from Australia c) to promote the consumption and sale of grape products, both in Australia and overseas, and d) to enable Australia to fulfil its obligations under prescribed wine trading agreements and other international agreements.

Responsible Minister During the year in review The Hon David Littleproud, as Minister for Agriculture and Water Resources, was our responsible Minister until 29 May 2019, with the Senator the Hon. Anne Ruston, as Assistant Minister for Agriculture and Water Resources, holding delegated responsibility until 28 August 2018. From 29 May 2019, Senator the Hon. Bridget McKenzie became Minister of Agriculture and holds responsibility.

Ministerial directions Ministerial direction may be given to Wine Australia by the responsible Minister under section 31K of the Wine Australia Act, or by the Finance Minister under section 22 of the PGPA Act. No such direction was given in the period under review.

Key activities and On 18 January 2019, an Agreement on Trade in Wine between the the changes affecting Government of Australia and the Government of the United Kingdom the Authority of Great Britain and Northern Ireland was signed. This means arrangements already in place between Australia and the EU, for wine and other exports, will continue to apply to the UK post-Brexit.

To give effect to the bilateral agreement, the Act was amended by the Wine Australia Amendment (Trade with United Kingdom) Act 2019, which was assented to on 12 March 2019.

Judicial decisions We were not the subject of any: and reviews by • judicial or administrative tribunal decisions that have had, or may have, a significant impact on our operations, or outside bodies • reports by the Auditor-General (other than the report on the financial statements), or a Parliamentary committee.

86 Freedom of Part 2 of the Freedom of Information Act 1982 (FOI Act) establishes information the Information Publication Scheme (IPS) for Australian government agencies subject to the FOI Act. The IPS commenced on 1 May 2011 and requires agencies to publish a broad range of information on their websites where possible. To find out more about the IPS see http://www.oaic.gov.au/publications/factsheets.html.

We are subject to the FOI Act and are required to comply with IPS requirements. As such, we prepared an Agency Plan (the Plan) as required by section 8(1) of the FOI Act. The Plan describes how we implement and administer the IPS in respect of our information holdings. In recognition that public sector information is a national resource managed for public purposes, we built and fostered an agency culture that embraced appropriate proactive disclosure of our information holdings, leading to successful implementation and administration of the IPS. We received one request under the FOI Act during the reporting period.

Environmental In accordance with the requirements of the Environment Protection and objectives Biodiversity Conservation Act 1999, it is reported that we: • supported the principles of ecologically sustainable development and sought to ensure that our activities accorded with those objectives by taking economic, environmental, social and equitable considerations into account in the decision-making process • aimed to enhance the operating environment for the benefit of the Australian wine sector – contributing to ecologically sustainable development by facilitating the development of the sector in a sustainable and responsible manner, and • cared for the environment by minimising the consumption of power and recycling waste products where practicable and ensuring our activities had minimal impact on the environment.

Privacy policy Our privacy policy is published on our website. The policy reflects the introduction of the Australian Privacy Principals that came into effect in March 2014 and the General Data Protection Regulation introduced in the European Union on 25 May 2018.

Indemnities and Wine Australia had Directors’ and Officers’ Liability insurance through insurance premiums ComCover. The insurer recommended that details of the policy and the premium paid not be disclosed. No indemnities have been provided to for officers any current or former officers.

87 88 Financial Statements

90–91 Statements by Chair and Chief Financial Officer 92–93 Independent auditor’s report 94 Statement of comprehensive income 95 Statement of financial position 96 Statement of changes in equity 97 Cash flow statement 98–99 Notes to and forming part of the financial statements 100–106 Financial performance 107–113 Financial position 114 Funding 115–118 People and relationships 119–122 Managing uncertainties 123–124 Other information

89 Statement made by the Board of Wine Australia

This statement is made by the Board of Wine Australia (as the accountable authority pursuant to section 12 of the PGPA Act1) and the General Manager of Corporate Services (being the person responsible for the preparation of the financial statements), in accordance with subsection 42(3) of the PGPA Act and section 10 of the Public Governance Performance and Accountability Rule 2014.

We, being the undersigned, certify that in our opinion: 1. The Annual Financial Statements annexed to this statement and prepared for Wine Australia for the year ended 30 June 2019 in accordance with section 42 of the PGPA Act: (a) comply with subsection 42(2) of the PGPA Act2; and (b) have been prepared based on properly maintained financial records as per subsection 41(2) of the PGPA Act3. 2. There are, at the time of this statement being made, reasonable grounds to believe that Wine Australia will be able to pay its debts as and when they fall due.

We confirm that this statement is made by the Board in accordance with a resolution of the Board.

Brian Walsh, Chair of the Board of Wine Australia

Steven Weinert, General Manager of Corporate Services (being the person responsible for the preparation of the financial statements)

24 September 2019

1 Public Governance Performance and Accountability Act 2013 2 Being that they comply with the accounting standards and any other requirements prescribed by the PGPA Rule and present fairly our financial position, financial performance and cash flows. 3 Being that the Board has ensured that they are kept in a way that: • complies with any requiremet prescribed by the PGPA Rule • enables the preparation of annual financial statements required by sections of 42 and 48 [preparation of Annual Financial Statements and preparation of annual consolidated financial statements], and • allows those financial statements to be conveniently and properly audited in accordance with the PGPA Act.

90 Statement made by the Board of Wine Australia

This statement confirms that the Annual Report 2018–19 of Wine Australia was approved by the Board of Wine Australia in accordance with subsection 17BB of the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule).

The Wine Australia Board, as the accountable authority of Wine Australia in accordance with section 12 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), is the entity responsible for preparing and giving the Annual Report to the Minister in accordance with section 46 of the PGPA Act.

I, Brian Walsh, being the undersigned and being the Chair of the Board, Wine Australia, confirm that the Annual Report 2018–19 of Wine Australia was approved by resolution of the Board on 24 September 2018.

Brian Walsh, Chair of the Board of Wine Australia

24 September 2019

91 INDEPENDENT AUDITOR’S REPORT To the Minister for Agriculture Opinion In my opinion, the financial statements of Wine Australia (‘the Entity’) for the year ended 30 June 2019: (a) comply with Australian Accounting Standards and the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015; and (b) present fairly the financial position of the Entity as at 30 June 2019 and its financial performance and cash flows for the year then ended. The financial statements of the Entity, which I have audited, comprise the following statements as at 30 June 2019 and for the year then ended: • Statement made by the Board of Wine Australia; • Statement of comprehensive income; • Statement of financial position; • Statement of changes in equity; • Cash flow statement; and • Notes to the financial statements, comprising a Summary of Significant Accounting Policies and other explanatory information. Basis for opinion I conducted my audit in accordance with the Australian National Audit Office Auditing Standards, which incorporate the Australian Auditing Standards. My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the Entity in accordance with the relevant ethical requirements for financial statement audits conducted by the Auditor-General and his delegates. These include the relevant independence requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) to the extent that they are not in conflict with the Auditor-General Act 1997. I have also fulfilled my other responsibilities in accordance with the Code. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Accountable Authority’s responsibility for the financial statements As the Accountable Authority of the Entity, the Board is responsible under the Public Governance, Performance and Accountability Act 2013 (the Act) for the preparation and fair presentation of annual financial statements that comply with Australian Accounting Standards and the rules made under the Act. The Board is also responsible for such internal control as the Entity determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Board is responsible for assessing the ability of the Entity to continue as a going concern, taking into account whether the Entity’s operations will cease as a result of an administrative restructure or for any other reason. The Board is also responsible for disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the assessment indicates that it is not appropriate. Auditor’s responsibilities for the audit of the financial statements My objective is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance

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92 with the Australian National Audit Office Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. As part of an audit in accordance with the Australian National Audit Office Auditing Standards, I exercise professional judgement and maintain professional scepticism throughout the audit. I also: • identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; • obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity’s internal control; • evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Accountable Authority; • conclude on the appropriateness of the Accountable Authority’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Entity’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the Entity to cease to continue as a going concern; and • evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. I communicate with the Accountable Authority regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

Australian National Audit Office

Rahul Tejani Audit Principal Delegate of the Auditor-General

Canberra 24 September 2019

93 Statement of comprehensive income for the year ended 30 June 2019

Actuals Actuals Budget 2019 2018 2019 Notes $ $ $ Net cost of services Expenses

Expenditure on research and development contracts 1.1A 23,113,563 23,963,641 23,736,973

Employee benefits 1.1B 12,370,282 10,236,186 12,195,743

Suppliers 1.1C 20,981,701 18,688,066 17,030,617

Grants 1.1D 5,072,991 238,306 5,800,000

Depreciation and amortisation 1.1E 406,851 328,420 558,000

Write-down of assets – Bad debts written off 1.1 3,412 1,455 1,000

Net losses from foreign exchange – Non Speculative 1.1 136,964 76,452 -

Levy collection fees 1.1 891,694 898,531 842,666

Total expenses 62,977,458 54,431,057 60,165,000

Less: Own-source income Own-source revenue

Industry contributions 1.2A 19,745,231 21,549,775 19,600,000

Sale of goods and rendering of services 1.2B 8,655,791 8,717,956 7,943,998

Rental income 1.2C 185,000 202,177 222,432

Research and development contributions 1.2D 1,169,187 1,169,010 859,010

Interest 1.2E 511,360 467,106 276,000

Other revenue 1.2F 5,872 25,714 5,000

Total own-source revenue 30,272,441 32,131,738 28,906,440

Net cost of services (32,705,017) (22,299,319) (31,258,560) Revenue from government Australian Government matching contributions 1.2 14,117,512 13,867,957 13,000,000

Other grants from Government 1.2G 16,737,996 18,514,630 16,258,560

Total revenue from Government 30,855,508 32,382,587 29,258,560

(Deficit)/Surplus attributable to the Australian Government (1,849,509) 10,083,268 (2,000,000)

Total comprehensive income attributable to the (1,849,509) 10,083,268 (2,000,000) Australian Government

The above statement should be read in conjunction with the accompanying Notes. Commentary on budget variances has been included in Other information within the Notes.

94 Statement of financial position as at 30 June 2019

Actuals Actuals Budget 2019 2018 2019 Notes $ $ $ Assets Financial assets

Cash and cash equivalents 2.1A 3,144,006 2,656,026 2,883,000

Trade and other receivables 2.1B 4,653,677 3,182,058 2,513,000

Other investments – Deposits at Bank 10,016,320 16,239,609 4,020,000

Total financial assets 17,814,003 22,077,693 9,416,000

Non-financial assets

Leasehold improvements 2.2A 100,335 - -

Plant and equipment 2.2B 281,791 429,282 114,000

Intangibles 2.2C 3,753,479 1,646,976 3,449,000

Inventories held for sale 2.2 - 7,900 -

Prepayments 2.2D 2,807,909 2,086,208 863,000

Total non-financial assets 6,943,514 4,170,366 4,426,000

Total assets 24,757,517 26,248,059 13,842,000 Liabilities Payables

Suppliers - Trade Creditors and Accruals 2.3 892,263 1,481,142 743,000

Research and development contracts 2.3A 307,007 228,212 2,623,000

Other payables 2.3B 841,714 129,807 60,000

Total payables 2,040,984 1,839,161 3,426,000

Provisions

Employee provisions 4.1 1,253,980 1,111,836 1,202,000

Other provisions 2.4A 110,000 95,000 95,000

Total provisions 1,363,980 1,206,836 1,297,000

Total liabilities 3,404,964 3,045,997 4,723,000

Net assets 21,352,553 23,202,062 9,119,000 Equity Retained surplus 21,352,553 23,202,062 9,119,000

Asset revaluation reserve - - -

Total equity 21,352,553 23,202,062 9,119,000

The above statement should be read in conjunction with the accompanying Notes. Commentary on budget variances has been included in Other information within the Notes.

95 Statement of changes in equity for the year ended 30 June 2019

Actuals Actuals Budget 2019 2018 2019 $ $ $ Retained earnings Opening balance

Balance at the beginning of the reporting period 23,202,062 13,118,794 11,119,000

Opening balance 23,202,062 13,118,794 11,119,000

Comprehensive income

Surplus for the period (1,849,509) 10,083,268 (2,000,000)

Total comprehensive income (1,849,509) 10,083,268 (2,000,000)

Transfers between equity components - - -

Closing balance as at 30 June 21,352,553 23,202,062 9,119,000

Total equity Opening balance

Balance at the beginning of the reporting period 23,202,062 13,118,794 11,119,000

Opening balance 23,202,062 13,118,794 11,119,000

Comprehensive income

(Deficit)/Surplus for the period (1,849,509) 10,083,268 (2,000,000)

Total comprehensive income (1,849,509) 10,083,268 (2,000,000)

Transfers between equity components - - -

Closing balance as at 30 June 21,352,553 23,202,062 9,119,000

The above statement should be read in conjunction with the accompanying Notes. Commentary on budget variances has been included in Other information within the Notes.

96 Cash flow statement for the year ended 30 June 2019

Actuals Actuals Budget 2019 2018 2019 Notes $ $ $ Operating activities Cash received Australian Government matching contributions 13,058,227 14,151,589 13,899,440 Other receipts from Government 16,703,943 18,895,877 16,258,560 Industry contributions 19,726,954 21,662,495 18,892,000 Sale of goods and rendering of services 10,849,721 9,097,264 6,022,000 Rental income 203,500 222,395 222,000 Interest 507,153 486,004 277,000 Research and development contributions and refunds 1,322,764 1,285,911 1,532,000 Net GST received 2,296,461 1,267,700 3,892,000 Other receivables 4,325 7,325 -

Total cash received 64,673,048 67,076,560 60,995,000 Cash used Employees (12,269,428) (9,969,833) (11,611,541) Suppliers (25,525,782) (21,483,589) (19,150,459) Expenditure on research and development contracts (30,187,821) (28,268,478) (32,021,000) and other grants Total cash used (67,983,031) (59,721,900) (62,783,000)

Net cash used by operating activities (3,309,983) 7,354,660 (1,788,000)

Investing activities Cash received Proceeds from sales of plant and equipment 5,904 8,025 - Proceeds from investments 31,594,661 20,144,206 9,000,000 Total cash received 31,600,565 20,152,231 9,000,000 Cash used Purchase of plant and equipment (36,503) (231,227) (30,000) Purchase of leasehold improvements (94,216) - - Purchase of intangibles (2,300,510) (1,187,350) (3,105,000) Purchase of investments (25,371,373) (25,334,834) (3,153,000) Total cash used (27,802,602) (26,753,411) (6,288,000)

Net cash from investing activities 3,797,963 (6,601,180) 2,712,000

Net decrease in cash held 487,980 753,480 924,000

Cash and cash equivalents at the beginning of the 2,656,026 1,902,546 1,959,000 reporting period

Cash and cash equivalents at the end of the reporting period 2.1A 3,144,006 2,656,026 2,883,000

The above statement should be read in conjunction with the accompanying Notes. Commentary on budget variances has been included in Other information within the Notes.

97 Notes to and forming part of the financial statements for the period ended 30 June 2019

Overview Objective of Wine Australia

Wine Australia is a corporate Commonwealth entity.

The objectives of Wine Australia are to: • coordinate or fund grape and wine research and development (R&D) and facilitate the dissemination, adoption and commercialisation of the results • control the export of wine from Australia, and • promote the sale and consumption of wine, both in Australia and overseas.

Our vision is for a prosperous Australian grape and wine community.

The basis of preparation

The financial statements are general purpose financial statements and are required by section 42 of the Public Governance, Performance and Accountability Act 2013.

The financial statements have been prepared in accordance with: • Public Governance, Performance and Accountability (Financial Reporting) Rule 2015 (FRR); and • Australian Accounting Standards and Interpretations - Reduced Disclosure Requirements issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position. The financial statements are presented in Australian dollars.

Unless an alternative treatment is specifically required by an accounting standard or the FRR, assets and liabilities are recognised in the statement of financial position when and only when it is probable that future economic benefits will flow to Wine Australia or a future sacrifice of economic benefits will be required and the amounts of the assets or liabilities can be reliably measured. However, assets and liabilities arising under executory contracts are not recognised unless required by an accounting standard. Liabilities and assets that are unrecognised are reported in the schedule of commitments or the contingencies note.

Unless alternative treatment is specifically required by an accounting standard, income and expenses are recognised in the Statement of Comprehensive Income when and only when the flow, consumption or loss of economic benefits has occurred and can be reliably measured.

98 No accounting assumptions or estimates have been identified that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next accounting period.

New Australian Accounting Standards

Adoption of new Australian Accounting Standard requirements Of the new standards, amendments to standards, revised standards, and interpretations that were issued prior to the sign-off date and that are applicable to the current reporting period, did not have a material effect on Wine Australia’s financial statements.

The transition from AASB139 to AASB 9 Financial Instruments had minimal impact on Wine Australia. Wine Australia values its Assets either at Cost or at Fair Value, which have minimal variances.

Future Australian Accounting Standard requirements AASB 16 Leases has not been early adopted by Wine Australia. This new/reissued standard applies to annual reporting periods beginning on or after 1 July 2019. This standard will have a material impact on Wine Australia’s financial statements due to the recognition criteria to record operating leases on the balance sheet. A preliminary assessment by Wine Australia indicates the impact to be a $1.6M increase on both assets and liabilities.

AASB 15 Revenue from Contracts with Customers has not been early adopted by Wine Australia. This new/reissued standard applies to annual reporting periods beginning on or after 1 July 2019. This standard will not have a material impact on Wine Australia’s financial statements due to the recognition of revenue over time.

With the exception of the above mentioned, no amendments to standards, revised standards and interpretations that have been issued by the AASB that are applicable to future reporting periods are expected to materially affect Wine Australia’s financial statements.

Taxation

Wine Australia is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and Services Tax (GST).

Revenues, expenses and assets are recognised net of GST, except: • where the amount of GST incurred is not recoverable from the Australian Taxation Office, and • for receivables and trade creditor payables.

Events after the reporting period

There has been no event after the reporting period with the potential to significantly affect the ongoing structure and financial activities of Wine Australia.

99 Financial performance

This section analyses the financial performance of Wine Australia for the period ended 30 June 2019.

Note 1.1: Expenses Research and development contracts (Accounting Policy – Most research and development (R&D) contracts require the research Expenses) provider to perform services, provide facilities or meet eligibility criteria. In these cases, liabilities are recognised only to the extent that the services required have been performed or the eligibility criteria have been satisfied by the research provider.

In cases where R&D contracts are made without conditions to be monitored, liabilities relating to the financial year ending 30 June 2019 are recognised on signing of the contract. Market research costs include data and contract work completed for our Market Insights Program.

Grants

Grants are awarded after review of applications and all criteria and/or obligations are met.

Employee benefits

Accounting policies for employee-related expenses are contained in the People and Relationships section.

Leases

Operating lease payments are expensed on a straight line basis which is representative of the pattern of benefits derived from the leased assets. Commitments shown are excluding GST.

Insurance

Wine Australia has insured for risks through the Government’s insurable risk managed fund, Comcover. Workers’ compensation is insured through Comcare.

Foreign currency

Transactions denominated in a foreign currency are converted at the exchange rate from the beginning of each month. Foreign currency receivables and payables are translated at the exchange rates current as at balance date. Associated currency gains and losses are brought to account in the Statement of Comprehensive Income.

100 Levy collection fees

The levy collection fee is a charge from the Department of Agriculture and for the collection of the various wine industry levies. The costs are recognised as an expense in the Statement of Comprehensive Income on a monthly basis.

2019 2018 Note 1.1A: Expenditure on research and development contracts $ $ Public sector Australian Government entities 3,873,828 4,885,650

State and territory governments 1,515,039 1,625,963

Universities/colleges 3,816,168 3,480,472 Private sector The Australian Wine Research Institute 8,645,000 8,933,333

Other organisations 2,235,065 938,282

Market research costs 671,448 659,427 Rural R&D for Profit Program 2,357,015 3,440,514 Total expenditure on research and development contracts 23,113,563 23,963,641

2019 2018 Note 1.1B: Employee benefits $ $ Wages and salaries 11,062,463 9,327,808

Superannuation

Defined contribution plans 898,255 572,059

Defined benefit plans 129,725 120,974

Leave and other entitlements 226,777 215,345

Separation and redundancies 53,062 -

Total employee benefits 12,370,282 10,236,186

101 2019 2018 Note 1.1C: Suppliers $ $ Goods and services supplied or rendered Occupancy costs 216,399 193,876

Contractors 337,863 480,067

Communications 118,790 119,040

Information technology 1,857,481 1,416,246

Marketing costs 12,601,676 11,997,511

Outside services 645,952 433,958

Travel and accommodation 990,730 885,394

Goods purchased 153,815 118,082

Advertising 32,006 34,743

Professional fees 1,995,985 959,469

Publications and subscription 121,263 210,112

Postage and freight 130,774 145,554

Other supplier expenses 653,107 653,451

Total goods and services supplied or rendered 19,855,841 17,647,503 Other supplier Operating lease rentals 1,034,416 961,071

Workers' compensation expenses (Comcare) 25,440 33,747

Liability insurance expenses (Comcover) 66,004 45,745

Total other supplier expenses 1,125,860 1,040,563

Total supplier expenses 20,981,701 18,688,066

Leasing commitments

Wine Australia holds five significant lease arrangements (2018: 5). One is with the National Wine Centre at the Adelaide head office; the others are lease contracts for the marketing offices interstate and overseas.

102 Commitments for minimum lease payments in relation to non-cancellable 2019 2018 operating leases are payable as follows: $ $

Within 1 year 1,131,766 919,491

Between 1 to 5 years 1,904,259 1,689,958

More than 5 years - -

Total operating lease commitments 3,036,025 2,609,449

2019 2018 Note 1.1D: Grants $ $ State grants 2,440,000 150,000

Competitive grants 1,332,500 -

Wine Export grants 1,300,491 88,306

Total grants 5,072,991 238,306

2019 2018 Note 1.1E: Depreciation and amortisation $ $ Depreciation Plant and equipment 183,963 195,827

Leasehold improvements 28,881 6,667

Total depreciation 212,844 202,494 Amortisation Intangibles: computer software 194,007 125,926

Total amortisation 194,007 125,926

Total depreciation and amortisation 406,851 328,420

103 Note 1.2: Revenue Industry contributions (Accounting Policy – Industry contributions are recognised as revenue to the extent they have Revenue) been received into Wine Australia’s bank account or are entitled to be received by Wine Australia at year end.

Industry contributions comprise the: • Grape Research Levy – a levy imposed under schedule 13 of the Primary Industries (Excise) Levies Act 1999 in respect of fresh and dried grapes, and grape juice produced in Australia. This levy is collected and paid to Wine Australia by the Australian Government - Department of Agriculture. The levy rate is $2 per tonne, of which 1.6 cents per tonne is paid directly to Plant Health Australia. • Wine Grapes Levy – a levy imposed under schedule 26 of the Primary Industries (Excise) Levies Act 1999 in respect of the manufacture of wine. The levy rate is $5 per tonne, of which 2.4 cents per tonne is paid directly to Plant Health Australia. • Wine Export Charge – a levy imposed under schedule 13 of the Primary Industries (Customs) Charges Act 1999 and calculated as a portion of the ‘free on board’ value of wine exported. This levy is collected by Wine Australia in accordance with a Collection Agreement entered into between Wine Australia and the Department of Agriculture and in 2015, in accordance with section 11 of the Primary Industries Levies and Charges Collection Act 1991.

Refer to Note 3.2 Accounting Policy: Industry contributions (net receiveable).

Revenue from Government

The matching contribution from the Australian Government is provided to fund grape and wine research. It is equal to half of the expenditure of Wine Australia (excluding levy collection fees), but limited to 0.5 per cent of the estimated gross value of industry production and the cumulative total of industry contributions paid.

Other Australian Government grants are recognised when: • Wine Australia obtains control of the contribution or the right to receive the contribution, • It is probable that the economic benefits comprising the contribution will flow to Wine Australia, and • the amount of the contribution can be measured reliably.

Goods and services

Revenue from the sale of goods is recognised when: • the risks and rewards of ownership have been transferred to the buyer, • Wine Australia retains no managerial involvement or effective control over the goods, • the revenue and transaction costs incurred can be reliably measured, and • it is probable that the economic benefits associated with the transaction will flow to Wine Australia.

104 Revenue from rendering of services is recognised by reference to the stage of completion of contracts at the reporting date. The revenue is recognised when: • the amount of revenue, stage of completion and transaction costs incurred can be reliably measured, and • the probable economic benefits associated with the transaction will flow to Wine Australia.

The stage of completion of contracts at the reporting date is determined by reference to the proportion that costs incurred to date bear to the estimated total costs of the transaction.

Interest revenue

Interest revenue is recognised using the effective interest method as set out in AASB 9 Financial Instruments: Recognition and Measurement.

Rental income

Rental income arising from the sublease of a portion of the premises is recognised in revenue in the month that it relates.

Sponsorship revenue

Sponsorship revenue is recognised in revenue once the relevant agreements have been signed and an invoice is raised.

The revenues described in this Note are revenues relating to Wine Australia’s core operating activities.

2019 2018 Note 1.2A: Industry contributions $ $ Grape research levy 3,549,142 4,113,727

Wine research levy 12,555,177 13,993,918

Wine export charge 3,640,912 3,442,130

Total industry contributions 19,745,231 21,549,775

2019 2018 Note 1.2B: Sale of goods and rendering of services $ $ Sale of goods 258,731 183,897

Rendering of services 8,397,060 8,534,059

Total sale of goods and rendering of services 8,655,791 8,717,956

2019 2018 Note 1.2C: Rental income $ $ Operating lease Sublease 185,000 202,177

Total rental income 185,000 202,177

105 Subleasing rental income commitments

Wine Australia subleases space to four tenants within the Adelaide head office. Three tenants have five-year commitments, in line with the head lease agreement. The other tenant is a month by month agreement, and therefore classed as a non-committed lease arrangement.

Note 1.2C: Rental income (continued) 2019 2018 Commitments for sublease rental income receivables are as follows: $ $

Within 1 year 202,228 196,498

Between 1 to 5 years 155,463 356,245

More than 5 years - -

Total sublease rental income commitments 357,691 552,743

2019 2018 Note 1.2D: Research and development contributions $ $ Rural R&D for Profit Program contributions from external sources 859,010 1,169,010

Other 310,177 -

Total research and development contributions and refunds 1,169,187 1,169,010

2019 2018 Note 1.2E: Interest $ $ Term deposits at bank 424,366 398,971

Credit interest 86,994 68,135

Total interest 511,360 467,106

2019 2018 Note 1.2F: Other revenue $ $ Sponsorship - 18,000

Other revenue 5,872 7,714

Total other revenue 5,872 25,714

2019 2018 Note 1.2G: Other grants from Government $ $ Export and Regional Wine Support Package 15,924,000 17,344,000

Rural R&D for Profit Program 746,939 1,098,471

Export Market Development Grant 67,057 72,159

Total revenue from Government 16,737,996 18,514,630

106 Financial position

This section analyses Wine Australia’s assets used to conduct its operations and the operating liabilities incurred as a result. Employee- related information is disclosed in the People and Relationships section.

Note 2.1: Cash and investments Financial assets Cash and cash equivalents consist of cash on hand and deposits in (Accounting Policy – bank accounts that are immediately available without notice. Cash is Financial assets) recognised at its nominal amount.

Investments are represented by a number of bank term deposits having various maturity dates, none more than six months from the reporting date. The value of the term deposits recognised is the nominal value of the cash invested. Accrued interest is treated as interest receivable.

Trade and other receivables

Receivables for goods and services are recognised at the nominal amounts due, less any impairment allowance account. Collectability of debts is reviewed as at the end of the reporting period. Allowances are made when collectability of the debt is no longer probable. Credit Terms for goods and services were within 30 days unless otherwise specified (2018: 30 days unless otherwise specified).

2019 2018 Note 2.1A: Cash and cash equivalents $ $ Cash at bank 3,142,545 2,655,154

Cash on hand 1,461 872

Total cash and cash equivalents 3,144,006 2,656,026

2019 2018 Note 2.1B: Trade and other receivables $ $ Goods and services receivables Goods - 28,037

Services 1,235,875 616,613

Total goods and services receivables 1,235,875 644,650 Other receivables Australian Government matching contributions receivable 2,104,356 1,045,072

GST receivable from the Australian Taxation Office 302,820 467,818

Industry contributions receivable 981,662 963,385

107 2019 2018 Note 2.1B: Trade and other receivables (continued) $ $ Interest receivable 6,039 1,833

Other receivable 22,925 59,300

Total other receivables 3,417,802 2,537,408

Total trade and other receivables (gross) 4,653,677 3,182,058

Refer to Note 1.2: Accounting Policy – Revenue

Less impairment allowance Goods and services - -

Total impairment allowance - -

Total trade and other receivables (net) 4,653,677 3,182,058 Trade and other receivables (net) expected to be recovered No more than 12 months 4,653,677 3,182,058

More than 12 months - -

Total trade and other receivables (net) 4,653,677 3,182,058 Trade and other receivables (net) aged as follows Not overdue 4,578,877 3,116,319

Overdue by:

0 to 30 days 63,767 52,808

31 to 60 days 10,283 12,167

61 to 90 days 750 109

More than 90 days - 655

Total trade and other receivables (net) 4,653,677 3,182,058

All trade and other receivables are expected to be settled within 12 months. All investments are current assets.

Note 2.2: Assets are recorded at cost on acquisition except as stated below. Non-financial assets The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially (Accounting Policy – measured at their fair value plus transaction costs where appropriate. Non-financial assets) Asset recognition threshold

Purchases of property, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than $1,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total). The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to ‘restoration’ provisions taken up by the entity where there exists an obligation to restore leased premises to original condition. The improvement costs are included in the value of the entity’s leasehold improvement with a corresponding provision for the ‘make good’ recognised.

108 Revaluations

Fair values for each class of asset are determined as shown below:

Asset class Fair value measured at: Leasehold improvements Depreciated replacement cost

Plant and equipment Market value

Furniture and fittings Depreciated replacement cost

Following initial recognition at cost, property, plant and equipment is carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. In accordance with the policy, valuations are performed by directors with sufficient frequency to ensure that the carrying amount of assets do not differ materially from the assets’ fair value as at the reporting date.

All revaluations are conducted in accordance with the revaluation policy. The policy was revised during the 2016-17 year and it was determined that all previous formal valuations resulted in immaterial differences. Therefore, it was recommended to the Board for Wine Australia to no longer have a formal valuation requirement. All assets are held at carrying amount. The last formal revaluation on each asset classed was performed for year end 30 June 2014.

Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reverses a previous revaluation decrement of the same asset class that was previously recognised in the surplus/deficit. Revaluation decrements for a class of assets are recognised directly in the surplus/deficit except to the extent that they reverse a previous revaluation increment for that class.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount.

No indicators of impairment were found for plant or equipment.

No material plant and equipment assets are expected to be sold or disposed of within the next 12 months.

Depreciation/amortisation

Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to Wine Australia using, in all cases, the straight-line method of depreciation. Leasehold improvements are depreciated on a straight-line basis over the lesser of the estimated useful life of the improvements or the unexpired period of the lease.

Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.

109 Depreciation rates applying to each class of depreciable asset are based on the following useful lives:.

Asset class 2019 2018 Leasehold improvements Lease term Lease term

Plant and equipment 3 years 3 years

Intangibles 3 to 5 years 3 to 5 years

Furniture and fittings 10 years 10 years

Impairment

All assets have been assessed internally for impairment as at 30 June 2019. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount.

The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if Wine Australia was deprived of the asset, its value in use is taken to be its depreciated replacement cost.

Derecognition

An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Intangibles Wine Australia’s intangible assets include purchased software and internally-developed software for internal use. These assets are carried at cost less accumulated amortisation and accumulated impairment losses. Purchased software is amortised on a straight-line basis over its anticipated useful life. Internally developed software is amortised on a straight line basis over three to five years from the date that the asset is first put into productive use.

All software assets have been assessed for impairment as at 30 June 2019 and no indicators of impairment were found for intangible assets.

The current Wine Export Approval system is expected to be decommissioned and disposed of in 2019-20. No other intangibles are expected to be sold or disposed of within the next 12 months.

Inventories Inventories held for sale are valued at the lower of cost and net realisable value.

Prepayments Prepayments are for goods or supplies that relate to future periods. They are expensed in the period of use.

110 Leasehold Leasehold Note 2.2A: Reconciliation of the opening and closing balances improvements improvements of leasehold improvements 2019 2018 $ $ As at 1 July Gross book value 904,505 904,505

Accumulated depreciation (904,505) (897,838)

Total as at 1 July - 6,667

Additions:

Purchase 94,216 -

Internally developed 35,000 -

Depreciation expense (28,881) (6,667)

Disposals:

Gross book adjustment (20,000) -

Accumulated depreciation adjustment 20,000

Total as at 30 June 100,335 -

Total as at 30 June represented by:

Gross book value 1,013,721 904,505

Accumulated depreciation and impairment (913,386) (904,505)

100,335 -

Plant and Furniture Note 2.2B: Reconciliation of the opening and closing balances equipment and fittings Total of plant and equipment 2018–19 $ $ $ As at 1 July Gross book value 1,019,289 50,152 1,069,441

Accumulated depreciation (629,696) (10,463) (640,159)

Total as at 1 July 389,593 39,689 429,282

Additions:

By purchase 36,503 - 36,503

Depreciation expense (179,227) (4,736) (183,963)

Disposals:

Gross book adjustment (69,077) - (69,077)

Accumulated depreciation adjustment 69,046 - 69,046

Total as at 30 June 246,838 34,953 281,791 Total as at 30 June represented by: Gross book value 986,715 50,152 1,036,867

Accumulated depreciation (739,877) (15,199) (755,076)

246,838 34,953 281,791

111 Computer Computer Note 2.2C: Reconciliation of the opening and closing balances software – software – of intangibles 2018-19 purchased developed Total $ $ $ As at 1 July Gross book value 576,279 2,562,071 3,138,350

Accumulated amortisation (336,275) (1,155,099) (1,491,374)

Total as at 1 July 240,004 1,406,972 1,646,976

Additions:

Purchase 571,000 1,756,011 2,327,011

Amortisation - (194,007) (194,007)

Disposals:

Gross book adjustment (26,501) - (26,501)

Accumulated amortisation adjustment - - -

Total as at 30 June 784,503 2,968,976 3,753,479 Total as at 30 June represented by: Gross book value 1,120,778 4,318,082 5,438,860

Accumulated depreciation (336,275) (1,349,106) (1,685,381)

784,503 2,968,976 3,753,479

Internally developed software in 2018-19 is the capitalisation of the new Wine Australia wine export approval system.

2019 2018 Note 2.2D: Prepayments $ $ Prepayments 2,807,909 2,086,208

Total prepayments 2,807,909 2,086,208

Prepayments expected to be recovered

No more than 12 months 2,799,642 2,022,924

More than 12 months 8,267 63,284

Total prepayments 2,807,909 2,086,208

Note 2.3: Payables Suppliers and research and development contracts (Accounting Policy – Payables) All payables are expected to be settled within 12 months. Settlement is usually made: • net 60 days for Australian Wine Overseas Program, • net 14 days for research and development contracts, and • net 30 days for all other suppliers.

Other payables

Other payables include Governement grants, marketing-related revenue and rents invoiced in advance. 112 2019 2018 Note 2.3A: Research and development contracts $ $ Accrued approved project expenses 307,007 228,212

Total research and development contracts 307,007 228,212

All research and development contracts payable are expected to be settled within 12 months.

2019 2018 Note 2.3B: Other payables $ $ Salaries and wages 53,543 109,333

Prepayments received/unearned income 787,008 18,925

Other 1,163 1,549

Total other payables 841,714 129,807

Total other payables are expected to be settled in:

No more than 12 months 841,714 129,807

More than 12 months - -

Total other payables 841,714 129,807

Note 2.4: Provisions Makegood (Accounting Policy – Wine Australia currently has three agreements for the leasing of premises Provisions) which have provisions requiring Wine Australia to restore the premises to their original condition at the conclusion of the leases. Wine Australia has made a provision to reflect the present value of this obligation.

Provision for Note 2.4A: Other provisions Total restoration As at 1 July 2018 95,000 95,000

Additional provisions made 35,000 35,000

Amounts reversed (20,000) (20,000)

Total as at 30 June 2019 110,000 110,000

Total other provisions are expected to be settled in:

No more than 12 months - -

More than 12 months 110,000 110,000

Total other provisions 110,000 110,000

113 Funding

This section identifies Wine Australia’s funding structure.

2019 2018 Note 3.1: Regulatory Note 3.1: Regulatory charging summary charging summary $ $ Expenses Direct costs 2,428,892 2,322,412

Indirect costs 1,759,047 1,624,769

Total expenses 4,187,939 3,947,181 External revenue Sale of goods and rendering of services 5,300,608 4,901,560

Total external revenue 5,300,608 4,901,560

Regulatory fees

Under s. 8(f) and (g) of the Wine Australia Act 2013 (‘the Act’), Wine Australia can charge to provide services, such as its export control and certification activities.

Regulation 6(1)(a) requires exporters to be licenced, 6(1)(d) requires wines to be assessed as sound and merchantable and 6(1)(f) requires export permits to be issued by Wine Australia before wine can be exported. Furthermore s. 8(c) of the Act provides Wine Australia the power to issue certificates required to demonstrate that wine meets the requirements of the market to which Australian wine is exported.

The fees are designed to cover the costs incurred in conducting Wine Australia’s export control activities and includes provision for replacement of the electronic approval system, which is nearing the end of its useful life and is being replaced in the 2019–20 year.

114 People and relationships

This section describes a range of employment and post-employment benefits provided to our people and our relationships with other key people.

Note 4.1: Liabilities for short-term employee benefits and termination benefits Employee provisions expected within twelve months of the end of reporting period are (Accounting Policy – measured at their nominal amounts. Employee provisions) Other long-term employee benefits are measured as net total of the present value of the defined benefit obligation at the end of the reporting period minus the fair value at the end of the reporting period of plan assets (if any) out of which the obligations are to be settled directly.

Leave

The liability for employee benefits includes provision for annual leave and long service leave.

The leave liabilities are calculated on the basis of employees’ remuneration at the estimated salary rates that will be applied at the time the leave is taken, including the entity’s employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination.

The liability for long service leave has been determined by reference to the work of an actuary as at 30 June 2019. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.

Separation and redundancy

Provision is made for separation and redundancy benefit payments. Wine Australia recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.

Superannuation

The entity’s staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), or the PSS accumulation plan (PSSap), or other superannuation funds held outside the Australian Government.

The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme. The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance’s administered schedules and notes. 115 The entity makes employer contributions to the employees’ defined benefit superannuation scheme at rates determined by an actuary to be sufficient to meet the current cost to the Government. The entity accounts for the contributions as if they were contributions to defined contribution plans.

The liability for superannuation recognised as at 30 June represents outstanding contributions.

2019 2018 Note 4.1: Employee provisions $ $ Long service leave 624,565 578,573

Annual leave 576,353 533,263

Separation or redundancies 53,062 -

Total employee provisions 1,253,980 1,111,836

Employee provisions are expected to be settled in:

No more than 12 months 1,015,602 897,594

More than 12 months 238,378 214,242

Total employee provisions 1,253,980 1,111,836

Note 4.2: Senior executive remuneration expenses Key management Key management personnel (KMP) are those persons having authority personnel and responsibility for planning, directing and controlling the activities remuneration of the entity, directly or indirectly, including any director (whether executive or otherwise) of Wine Australia.

For the purpose of this note, Wine Australia has defined KMPs, as Directors, the Chief Executive Officer (CEO), and selected employees who report directly to the CEO. These employees are considered to have the capacity and responsibility for decision-making that can have a significant and direct impact on the strategic direction and financial performance of Wine Australia.

Wine Australia reviewed the updated guidance of RMG-138: Commonwealth entities Executive Remuneration Reporting Guide for Annual Reports and the total number of senior management positions included in this table is 17 (12 in 2017–18 with a total value of $1.678M if this new guidance had been in place).

116 Name Position Term as KMP

Clark, Andreas Chief Executive Officer (CEO) Full year

Barclay, Stuart General Manager (GM) Full year

Weinert, Steven General Manager (GM) Full year

Waters, Elizabeth General Manager (GM) Full year

Walsh, Brian Board member Full year

Retallack, Mary Board member Full year

Croser, Brian Board member Full year

Allan, Michele Board member Part-year – Appointed 1st October 2018

Cooper, Catherine Board member Part-year – Appointed 1st October 2018

Høj, Peter Board member Part-year – Appointed 1st October 2018

Oates, Catherine Board member Part-year – Appointed 1st October 2018

Taylor, Mitchell Board member Part-year – Appointed 1st October 2018

Brown, Eliza Board member Part-year – Term completed 30th September 2018

Dearie, David Board member Part-year – Term completed 30th September 2018

Peter, Edouard Board member Part-year – Term completed 30th September 2018

Todd, Keith Board member Part-year – Term completed 30th September 2018

Williams, Kimberley Board member Part-year – Term completed 30th September 2018

2019 2018 Note 4.2: Key management personnel remuneration $ $ Short-term employee benefits: Salary 1,307,888 1,899,507

Other benefits and allowances 99,719 87,478

Total short-term employee benefits 1,407,606 1,986,985 Post-employment benefits Superannuation 173,448 246,150

Total post-employment benefits 173,448 246,150 Other long-term employee benefits Annual leave accrued 93,424 151,710

Long service leave accrued 27,995 56,176

Total other long-term employee benefits 121,419 207,886

Total senior executive remuneration expenses 1,702,474 2,441,021

117 Note 4.3: Related party relationships Related party Wine Australia is an Australian Government controlled entity. Related disclosures parties to the entity are Directors and Key Management Personnel, and other Australian Government Entities.

Transactions with related parties

Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. Such transactions include the payment or refund of research grants. These transactions have not been separately disclosed in this note.

The following transactions with related parties occurred during the financial year: • A Grant was made to All Saints Estate, which Director, Eliza Brown owns shares in. They were approved under Wine Export Grant Scheme and were made on normal terms and conditions. • Grants were made to Wine Communicators of Australia, which a Wine Australia Employee is a Director of. They were approved under Competitive Grant Scheme and were made on normal terms and conditions.

There was no balances outstanding at year end.

2019 2018 Note 4.4: Note 4.4: Remuneration of auditors Remuneration of $ $ Remuneration of auditors auditors Audit of the financial statements 41,000 41,000

Total remuneration of auditors 41,000 41,000

Auditor fees

The fair value of services provided by the Auditor-General in auditing the financial statements for the reporting period.

118 Managing uncertainties

This section analyses how Wine Australia manages financial risks within its operating environment.

Note 5.1: Financial assets Financial instruments With the implementation of AASB 9 Financial Instruments for the first (Accounting Policy – time in 2019, the entity classifies its financial assets in the following Financial instruments) categories: a) financial assets at fair value through profit or loss; b) financial assets at fair value through other comprehensive income; and c) financial assets measured at amortised cost.

The classification depends on both the entity’s business model for managing the financial assets and contractual cash flow characteristics at the time of initial recognition. Financial assets are recognised when the entity becomes a party to the contract and, as a consequence, has a legal right to receive or a legal obligation to pay cash and derecognised when the contractual rights to the cash flows from the financial asset expire or are transferred upon trade date.

Comparatives have not been restated on initial application.

Financial Assets at Amortised Cost Financial assets included in this category need to meet two criteria: 1. the financial asset is held in order to collect the contractual cash flows; and 2. the cash flows are solely payments of principal and interest (SPPI) on the principal outstanding amount.

Amortised cost is determined using the effective interest method.

Effective Interest Method Income is recognised on an effective interest rate basis for financial assets that are recognised at amortised cost.

Financial Assets at Fair Value Through Other Comprehensive Income (FVOCI with recycling) Financial assets measured at fair value through other comprehensive income are held with the objective of both collecting contractual cash flows and selling the financial assets and the cash flows meet the SPPI test.

Any gains or losses as a result of fair value measurement or the recognition of an impairment loss allowance is recognised in other comprehensive income.

119 Financial Assets at Fair Value Through Profit or Loss (FVTPL) Financial assets are classified as financial assets at fair value through profit or loss where the financial assets either doesn’t meet the criteria of financial assets held at amortised cost or at FVOCI (i.e. mandatorily held at FVTPL) or may be designated.

Financial assets at FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest earned on the financial asset.

Impairment of Financial Assets

Financial assets are assessed for impairment at the end of each reporting period based on Expected Credit Losses, using the general approach which measures the loss allowance based on an amount equal to lifetime expected credit losses where risk has significantly increased, or an amount equal to 12-month expected credit losses if risk has not increased.

The simplified approach for trade, contract and lease receivables is used. This approach always measures the loss allowance as the amount equal to the lifetime expected credit losses.

A write-off constitutes a derecognition event where the writeoff directly reduces the gross carrying amount of the financial asset.

Financial liabilities

Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or other financial liabilities. Financial liabilities are recognised and derecognised upon ‘trade date’.

Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss are initially measured at fair value. Subsequent fair value adjustments are recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability.

Other financial liabilities at amortised cost Financial liabilities are initially measured at fair value, net of transaction costs. These liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective interest basis.

Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

120 Note 5.1A: Categories of AASB 139 AASB 9 financial instruments AASB 139 original AASB 9 new carrying amount carrying amount Classification of financial classification classification at 1 July 2018 at 1 July 2018 assets on the date of initial $ $ application of AASB 9 Financial assets class Note Deposits at bank 2.1 Held-to-maturity Amortised Cost 16,239,609 16,239,609

Cash and cash equivalents 2.1A Receivables Amortised Cost 2,656,026 2,656,026

Interest receivable 2.1B Receivables Amortised Cost 1,833 1,833

Australian Government 2.1B Receivables Amortised Cost 1,045,072 1,045,072 matching contributions receivables

Industry contributions 2.1B Receivables Amortised Cost 963,385 963,385 receivables

Other receivables 2.1B Receivables Amortised Cost 703,951 703,951

Total financial assets 21,609,876 21,609,876

2019 2018 Note 5.1A: Categories of financial instruments $ $ Financial assets under AASB 139 Held-to-maturity investments:

Deposits at bank 10,016,320 16,239,609

Total held-to-maturity investments 10,016,320 16,239,609

Receivables:

Cash and cash equivalents 3,144,006 2,656,026

Interest receivable 6,039 1,833

Australian Government matching contributions receivables 2,104,356 1,045,072

Industry contributions receivables 981,662 963,385

Other receivables 1,258,800 703,951

Total receivables 7,494,863 5,370,267

Total financial assets 17,511,184 21,609,876 Financial liabilities Financial liabilities measured at amortised cost:

Suppliers 892,263 1,481,142

Research and development contracts 307,007 228,212

Total financial liabilities measured at amortised cost 1,199,270 1,709,354

Total financial liabilities 1,199,270 1,709,354

Wine Australia has no reclassifications or remeasurements of financial assets to disclose.

121 2019 2018 Note 5.1B: Net gains or losses on financial assets $ $ Held-to-maturity investments:

Interest revenue 424,366 398,971

Net gain on held-to-maturity investments 424,366 398,971

Receivables:

Interest revenue 86,994 68,135

Exchange losses (136,964) (76,452)

Net gain on receivables (49,970) (8,317)

Net gain on financial assets 374,396 390,654

Note 5.2: There were no material adjustments required for the internal revaluation, Fair value therefore no increments or decrements were adjusted through the measurements statement of financial position. The following tables provide an analysis of assets and liabilities that are measured at fair value. The remaining assets and liabilities disclosed in the Statement of Financial Position do not apply the fair value hierarchy.

The different levels of the fair value hierarchy are defined below.

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that Wine Australia can access at measurement date.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability.

Note 5.2A: Fair value measurement 2019 2018 Valuation Significant inputs Asset class Level $ $ techniques ¹ used Leasehold improvements (including fit out) 100,335 - 3 Depreciated Replacement cost replacement cost new (price per (DRC) square metre) Net present value Current obligation costs (price per square metre) Indexation rates² Discount rate²

Plant and equipment 281,791 464,371 2 Market approach Adjusted market transactions

Total assets measured at fair value 382,126 464,371

1. There have been no changes to valuation techniques. 2. Current restoration costs have been indexed to the obligation date (generally the expiry of the lease term) using industry building cost indices relevant to the asset’s city and then discounted, where the time value of money is material using the Australian Government 5-year bond rate. The estimated provision is depreciated in line with the corresponding leasehold improvement asset.

122 Other information

Note 6.1: Budgetary Departmental major budget variances for 2018–19 reports and Variances are considered to be ‘major’ based on the following criteria: explanations of • the variance between budget and actual is greater than 10 per cent or major variances equal to or greater than $150,000, and • the variance between budget and actual is greater than 2 per cent of the relevant category (Income, Expenses and Equity totals), or • an item below this threshold but is considered important for the reader’s understanding.

Affected line items Explanations of major variances (and statement) Other grants from Government Milestone of the Rural R&D 4 Profit Program for April 2019 was for $512K. • Comprehensive Income This was not originally included in the PBS budget. Sale of goods and services The variance of $760K was made up predominately of under budgeted Marketing • Comprehensive Income Revenue for user pays activities. Some marketing events are run on a cost recovery basis with additional levy funds invested, however some events are executed on a break even basis. Wine Australia invests levy funds as well as the user pays revenue to increase the scope and quality of the events in terms of the quality of venues, promotional materials and presentation. Australian Government Commonwealth matching/Trade and other receivables The Commonwealth matching contributions are determined by the (Gross Value • Comprehensive Income/ of Production) GVP. The claim is capped, and that cap is based on a three-year Financial Position average yield. The budget assumed minimal growth in value or yield and was not budgeted to exceed last year’s claim. Research and development contributions The variance of $310K is from co-contributions from research partners who are • Comprehensive Income contributing towards new research projects contracted in 2018-19. This additional income was not budgeted for. Interest income/Trade and other receivables The variance of $235K is additional income generated through invested grant funds • Comprehensive Income/ into Term Deposits until funds were acquitted. Financial Position Expenditure on research and development contracts/ R&D payables Variance of $625K. Each year Wine Australia makes a budget allowance for new • Comprehensive Income projects. The variance is caused by a combination of two main reasons, that only some new projects were commenced and secondly, other variances were caused by variations to existing contracts due to project delays.

123 Affected line items Explanations of major variances (continued) (and statement) Grants Variance of $727K. The PBS was based on estimated timing of grants payable for • Statement of each of the State, Competitive and Wine Export Grant schemes. The timing of actual Comprehensive Income – milestone payments was later than budgeted and therefore there was a timing Expenses variance. The grant programs will finish in 2019–20. • Statement of Financial Position – Liabilities • Cash Flow Statement Employee expenditure Actual expenses were higher than anticipated primarily associated with additional • Statement of employees for the facilitation and delivery of the $50m Package Comprehensive Income – Expenses • Cash Flow Statement Supplier expenditure Actual expenses were higher than anticipated due to expenditure relating to • Statement of both the $50m Package and our Levy funded activities. A deficit this year for the Comprehensive Income – $50m Package is reserves carried over from a surplus in 2017–18. In this area, more Expenses was spent on suppliers than the original budget caused by timing of spend • Statement of Financial between years. Position – Liabilities • Cash Flow Statement Depreciation/Intangibles The depreciation expense variance for 2018–19 is timing issue. Wine Australia had • Statement of two major projects during the year, the Wine Export Approval (WEA) replacement Comprehensive Income – system and the GAIA (Geospatial Artificial Intelligence for Agriculture) platform. Expenses Depreciation will not commence until the systems are available for use which will be • Statement of Financial later than budgeted. Therefore the capital expenditure has occurred but the system Position – Asset is still a work in progress and not a depreciating asset by the end of the 2018–19 • Cash Flow Statement financial year. Plant and equipment The variance for Plant and Equipment relates to the opening balance and previous • Statement of Financial years purchases. More IT equipment was purchased last year than budgeted for, Position – Asset and due to the timing of the when the PBS is completed, the lower amount less this • Cash Flow Statement years depreciation reduced the balance at year end in the PBS. Prepayments In addition to the R&D and general creditors prepaid allowed for in the PBS, the • Statement of Financial actuals also include approximately $1.5M prepaid costs for our major marketing Position – Asset campaign Far From Ordinary in September 2019. Term Deposits There is still unspent funds from year two of the $50m Package EWRSP grant. The • Statement of Financial unspent grant has been held in term deposits, earning interest until the funds are Position – Asset required in 2019–20. • Cash Flow Statement

124 125 126 Appendices

128–136 Appendix I: RD&E funded projects 138–139 Appendix II: Provider and management codes 140–141 Appendix III: Glossary of acronyms and terms 142–144 Appendix IV: Compliance index 145–148 Appendix V: Alphabetical index

127 Appendix I: RD&E funded projects

Approved funding Project number Title 2018–19 $

Priority 1

Strategy 3: Building Australian vine and wine excellence

3.1 Grapegrowing for excellence

AWR 1601 Digital solutions for grape quality measures at the weighbridge 36,435

CRD 1601 Digital technologies for dynamic disease management 413,000

CSA 1601 New technologies for dynamic canopy and disease management 399,606

CSA 1602 New non-destructive technologies for simultaneous yield, crop condition 380,949 and quality estimation

CSA 1603 Simple tools for spatial analysis – key enabling technologies for Precision 84,292 and Digital Viticulture

CSL 1401 The yield:quality nexus. Substantiating similarity in the patterns of 75,090 variation in grape yield/vine vigour and indices of fruit quality

CSU 1501 Developing a phone-based imaging tool to inform on fruit volume and (62,093) potential optimal harvest time

UQ 1601 LiDAR and PACE for Vineyards 113,311

USA 1601 Use of Unmanned Air Vehicles for early, real time detection of extreme 70,750 weather events in vineyards

UT 1601 Taking grapevine yield forecasting into the digital age 120,472

3.2 Wine provenance and measures of quality

AWR 1701-3.1.1 Identification and control of volatile compounds responsible for important 655,861 sensory attributes

AWR 1701-3.1.2 Using glycosides and other flavour precursors for improved wine flavour 124,594

AWR 1701-3.1.3 Molecular drivers of wine texture and taste 336,441

AWR 1701-3.3.1 Objective measures of quality and provenance in Australian vineyards 154,596

AWR 1701-3.4.2 Formation and fate of sulfur compounds associated with negative 246,258 attributes in wines

AWR 1701-4.4.1 Defining regional variability and uniqueness of premium Australian Shiraz 26,820

AWR 1701-4.4.2 Development of tools to verify origin and varietal nature of wines 151,450

AWR 1701-4.4.4 Rotundone and its role in defining terroir in iconic Australian cool climate 146,093 ‘peppery’ Shiraz

CSU 1301 Determination of thresholds for bunch rot contamination of grapes and 80,386 techniques to ameliorate associated fungal taints

CSU 1602 Benchmarking regional and subregional influences on Shiraz fine wines 33,171

CSU 1702-2 Determining thresholds for bunch rot tolerance in wine and detection of 106,804 unwanted fungal aromas

UA 1602 Understanding the drivers of terroir in the Barossa Valley 998,216

128 Approved funding Project number Title 2018–19 $ UT 1502 Building and measuring the quality of fine Australian sparkling wines, 279,399 through identification of the impact compounds responsible for ‘autolytic character’ in sparkling wine, and novel winemaking technologies to hasten autolysis.

UT 1503 Pinot Noir provenance: Australian benchmarking to support growing, 182,785 making, perception of quality, and marketing to add value to the Pinot Noir supply chain

3.3 Customer insights

FU 1701 Ties that Bind: Building strong importer and retailer relationships to drive (11,475) premium wine export sales

UA 1601 The Ties that Bind: Building strong importer and retailer relationships to (8,823) drive premium wine export sales

USA 1501 Driving the strategic growth of Australian wines in the US export market 27,069

USA 1602 Creating opportunity for Australian ‘fine’ wine in China 40,604

WOP 1401 The opportunities for further market share expansion of Australia’s regional 10,288 and premium price segment wines in the US market

Sub–total for Priority 1 5,212,348

Priority 2

Strategy 4: Improving resource management and sustainability

4.1 Climate adaptability

AGW 1706 MLA Contribution Agreement – Rural RnD4Profit-16-03-007 Forewarned is 50,000 forearmed: managing the impacts of extreme climate events

AWR 1603 Mitigation of climate change impacts (Smoke Taint) on the national wine 216,363 industry

AWR 1701-4.1.1 Managing the impact of vintage advancement and compression 160,173

LTU 1601 Mitigation of climate change impacts (Smoke Taint) on the national wine 521,837 industry

SAR 1701-2.1 Climate adaptation: developing irrigation strategies to combat dry winters 234,575

SAR 1701-2.3 The establishment of Cabernet Sauvignon trials in preparation for the 80,000 evaluation of clonal response to climate and management

UA 1502 Using in-canopy misters to mitigate the negative effects of heatwaves 33,391 on grapevines

UA 1503 Epi-breeding – Using the epigenetic memory of stress to prime Australian 29,276 grapevines for a changing environment

UT 1504 Australia’s wine future: Adapting to short-term climate variability and 211,387 long-term climate change.

WA 1904 Climate Research Strategy for Primary Industries CRSPI – Phase 3 Strategy 5,000

129 Approved funding Project number Title 2018–19 $ 4.2 Foundation data

AWR 1701-4.3.1 Characterising genomic diversity in Australia’s grapevine germplasm 76,882

WA 1808 AgriFutures Australia Phase II – $100bn growth strategy 10,000

WA 1810 Re-digitise Geographical Indication boundaries for Australian wine regions 36,910

WA 1902 Australian Germplasm Register Project 45,000

4.3 Sustainable resource management

2XE 1501 Activity based costing tool and benchmarking database development and 30,600 extension project

4.4 Biosecurity, pest and disease management

AGW 1606 Preparation of applications to DAWR under the Assistance Grants – 13,408 Access to Industry Priority Uses of AgVet Chemicals Programme

AGW 1705 Plant Biosecurity Research Initiative 16,922

AGW 1710 Improving plant pest management through cross industry deployment 50,000 of smart sensor, diagnostics and forecasting

AWR 1701-4.5.1 Understanding the basis of agrochemical resistance in biotrophic 60,789 grapevine pathogens

DED 1701 Integrated management of established grapevine phylloxera 354,651

PHA 1801 Review of the Biosecurity Plan and Manual for the Viticulture Industry 51,355

SAR 1701-1.1 Grapevine trunk disease management for vineyard longevity in diverse 374,709 climates of Australia

SAR 1701-1.2 Managing fungicide resistance in Australian viticulture 451,291

WA 1801 Upgrade of Powdery Mildew App developed for University of Adelaide to 4,250 include Grapevine Truck Disease assessment

WA 1805 Plant Biosecurity RD&E Strategy 9,090

Strategy 5: Improving vineyard performance

5.1 Enhancing grapevine and rootstock performance

CSA 1701-1.1 Scion genetics and improvement: development of new disease-resistance 542,516 varieties

CSA 1701-1.2 Scion genetics and improvement: desirable consumer traits 284,268

CSA 1701-1.3 Rootstock genetics and improvement: new improved rootstocks with 411,819 durable resistance to root-knot nematodes and phylloxera

CSA 1701-1.4 Rootstock genetics and improvement – tolerance to abiotic stress 600,179

CSA 1701-1.5 Field trials – new scion-rootstock combinations and evaluation of new 256,291 technology for improved water use efficiency and reduced costs

CSA 1701-1.6 Regional evaluation of new germplasm – pathway to adoption 278,608

CSA 1701-1.7 Enabling technologies and genetic resources 251,501

CSP 1303 Towards elite mildew resistant selections suitable for industry use 272,127

CSP 1306 Genetic transformation of grapevine to test significant abiotic stress and 70,505 pest resistance genes

130 Approved funding Project number Title 2018–19 $ 5.2 Efficient and sustainable vineyard management

CSA 1701-2.1 Physiology of root:shoot interactions 358,127

CSA 1701-2.2 Adjusting grape berry ripening to suit a changing climate: plant growth 472,796 regulator-based solutions

CSU 1702-1 SmartWine 73,126

CSU 1702-3 Vine nutrition 108,807

CSU 1702-5 Managing wine pH in a changing climate 103,438

CRD 1901 Australian Agriculture: Growing a Digital Future (P2D2 Phase 1) 50,000

DPI 1702 Manipulating winegrapes with antitranspirants 2,880

UA 1802 Integrated vineyard precision control system pilot 227,800

UA 1803-1.1 Digital tools for canopy management to increase competitiveness 221,876

UA 1803-1.2 Cell death in grape berries: causes, consequences, and control 158,127

UA 1803-1.3 Plant sensor-based precision irrigation for improved vineyard water 127,762 use efficiency, grape and wine composition and quality, and vineyard profitability

UA 1803-1.4 Undervine cover cropping for healthy and productive soils 236,559

UA 1705 Plant sensor-based precision irrigation for improved vineyard water 62,937 use efficiency, grape and wine composition and quality, and vineyard profitability

UA 1706 Undervine cover cropping for healthy and productive soils 168,613

Strategy 6: Improving winery performance

6.1 Enhanced yeast and bacterial performance

AWR 1701-3.2.1 Putting microbial diversity to work in shaping wine style 387,494

AWR 1701-3.2.2 The relationship between grape juice composition and the progress of 402,793 alcoholic and malolactic fermentation

AWR 1701-3.2.3 Management and optimisation of the AWRI Wine Microorganism Culture 121,500 Collection

AWR 1701-3.4.1 Understanding Brettanomyces and its adaptation to control measures 156,286

AWR 1701-4.4.3 Bioprospecting Australian microbial genetic diversity 302,097

UA 1707 New and improved yeast and bacterial starter cultures-novel attributes, (114,744) process efficiency and wine distinctiveness

UA 1803-2.1 New and improved yeast and bacterial starter cultures-novel attributes, 318,179 process efficiency and wine distinctiveness

131 Approved funding Project number Title 2018–19 $ 6.2 Efficient winery production

AWR 1701-3.1.4 Managing wine extraction, retention, clarity and stability for defined styles 320,168 and efficient production

AWR 1701-3.1.5 Influencing wine style and efficiency through management of oxygen 266,063 during wine production

AWR 1701-3.1.6 Winemaking interventions to modulate glutathione status 150,216

CSU 1702-4 The impact of metal speciation on the development, shelf-life and sensory 107,825 properties of wine

Strategy 7: Enhancing market access

7.1 Market access

AWR 1701-1.3.1 Supporting market access, safety and regulation 95,159

AWR 1701-1.5.1 Collecting and disseminating information on agrochemicals 124,106

AWR 1701-5.3.1 Tracking trends in Australian wine composition and vineyard and winery 39,246 practices

WFA 1201 Market access impediments and opportunities for the Australian wine sector 8,300

WFA 1801 Market access impediments and opportunities for the Australian wine sector 25,000

Strategy 8: Building capability

8.1 Developing people

AGW 1401 Future Leaders (13,918)

AGW Ph1501 Bioprospecting the regional genetic diversity of Australian wine microbiota 9,855

AGW Ph1502 Genetic mechanisms that underpin chloride and sodium exclusion in 2,999 grapevine germplasm

AGW Ph1503 Decoding the unique terroir of Australian wines using a multi-omics approach 10,997

AGW Ph1504 A low power flexible sensor network system for viticulture 12,569

AGW Ph1507 A cross cultural study of the impact of Australian wines of provenance and 6,427 food pairings on the consumer gastronomic experience

AGW Ph1509 Impacts of viticultural conditions and juice composition on the oxidative 6,180 and reductive development of wine.

AGW Ph1510 Identification and understanding of Saccharomyces and Oenococcus 10,997 interactions in co-inoculated cultures for development of robust inoculation pairs in wine fermentation.

AGW Ph1511 Developing Botrytis cinerea as a potent non-GM enzyme producer for the 1,856 removal of haze-forming proteins under normal winemaking conditions

AGW Ph1512 Origin of varietal thiols: environmental and winemaking effects 5,284

AGW Ph1513 Autonomous in-vivo determination of maturity parameters 5,000

AGW Ph1601 Developing digital tools for canopy management 18,318

AGW Ph1602 Microbial terroir: Understanding the importance of the soil-borne microbial 18,084 community to Australian terroir

AGW Ph1603 Yeast strain construction using CRISPR/Cas9 mediated genome editing 18,318

132 Approved funding Project number Title 2018–19 $ AGW Ph1604 Locating terroir: understanding businesses’ identification with their 18,303 local environment, place and community, and how this influences wine purchasing decisions and corporate sustainability

AGW Ph1605 Alternative technology to modify and measure wine astringency, taste 18,318 and quality

AGW Ph1606 Characterisation of the microbiome associated with grapevines and 12,018 evaluation of endophytic microorganisms as biological control agents of grapevine trunk disease pathogens

AGW Ph1607 Improving grapevine yield and wine quality through optimised vine 18,318 nutrition and pruning

Alumnii Support Alumnii Support 51,586

CSU 1701 Incubator initiative: Can we visually identify different sorts of herbicide 432 injury in grapevines based on foliage and fruit symptoms?

CSU 1801 Incubator Initiative: What management strategies are most effective in 20,000 minimising sunburn damage in Chardonnay vineyards around Orange?

CSU 1802 Incubator Initiative: How can we influence potassium (K) levels in the 20,000 vineyard so wines don’t need tartaric acid additions in the winery, and what is the mechanism of K accumulation within the grape berry?

CUT 1701 Incubator initiative: How can small producers in Western Australia achieve 1,309 economies of scale efficiencies in logistics and distribution?

DPR 1801 Incubator Initiative: Do viral infection(s) in the Gingin clone of Chardonnay 16,933 influence vine phenotype, performance and consequent wine quality?

F2F 1901 Farmers2Founders pilot program 65,000

GWR Ph1317 Enhanced biological control of light brown apple moth in vineyards (787)

RDC PhDs Workshop expenses 6,515

UA 1702 Incubator initiative: Is berry shrivel in Cabernet Sauvignon influenced by 2,925 climate and does this potentially affect characteristics of the resulting wine?

UA 1708 Translation of Training Centre for Innovative Wine Production Research into 154,500 Industry Outcomes

UA 1801 Incubator Initiative: What practices in the vineyard lead to the consistent 17,000 production of medal-winning wines?

UM 1801 Incubator Initiative: Which grapevine rootstock performs the best for 17,000 Mornington Peninsula Pinot Noir?

WA 1807 2017 Future Leaders (Pragmatic Thinking) 152,500

WA L1801 ABARES Science and Innovations Award 2019 (Rocco Longo) 22,727

WA L1802 Nuffield Scholarship 2018 (Richard Leask) 53,000

WA Ph1701 Isolation and characterisation of phytotoxins produced by the 12,412 Botryosphaeriaceae and their role in grapevine trunk diseases

WA Ph1703 Assessing the suitability of indigenous Cypriot grape varieties for 17,918 Australia’s challenging and changing climate.

WA Ph1704 A systematic approach to understanding wine texture and mouthfeel 24,600

WA Ph1705 Novel approaches to autolysis manipulation and improving efficiencies 18,712 in sparkling wine production

133 Approved funding Project number Title 2018–19 $ WA Ph1706 The molecular diversity of viruses infecting Australian grapevines 17,918

WA Ph1707 Towards differential management to supply more fruit at desired price point 8,230

WA Ph1801 Exploration of macromolecular complexes in wine using the Vortex Fluidic 2,468 Device

WA Ph1802 Understanding and managing grape berry heterogeneity in the vineyard to 1,348 improve Cabernet Sauvignon wine quality

WA Ph1803 Identification of new precursors and factors affecting varietal thiols and 6,348 their precursors in grapes and wines

WA Ph1804 Characterising the distinctive flavours of Australian Cabernet Sauvignon Wines 1,348

WA Ph1805 Breaking the sugar flavour nexus: Producing grapes with less sugar and 1,348 more flavour.

WA PH1806 Developing and assessing different cordon establishment techniques for 7,252 long term vineyard management

WA Ph1901 Rootstock effects on grape rachis (bunch-stem) composition and the 14,167 implications for red wine flavour and aroma

WAT 1801 Presentation at the 21th GiESCO International Meeting, Thessaloniki, 2,000 23–28 June 2019

WAT 1802 Paper presentation and attend 21st GiESCO International Meeting, Greece 2,500 23–28th June

WAT 1803 Attendance and oral presentation at the 19th International Reinhardsbrunn 2,500 symposium: Modern fungicides and antifungal compounds

WAT 1804 GiESCO 2019 2,500

WAT 1805 Presentation and attendance at the 21st GiESCO International Meeting, 2,500 Greece, June 23–28, 2019

WAT 1806 Travel to New Zealand in 2019 to attendance at the 13th Australian and 1,500 New Zealand sensory and Consumer Science Symposium and seminar to research organisations

WAT 1807 21th GiESCO International Meeting, (Thessaloniki, 23–28 June 2019) – 2,500 attendance and presentation

Strategy 9: Business intelligence and measurement

9.1 Business intelligence

UA 1803-3.1 Market Intelligence and Research 69,650

GI & Vintage GI and Vintage survey 4,200 survey

Market Research Market Intelligence and Research Data 520,748

VinSites VinSites – imaging of vineyards 146,501

9.2 Measurement

Evaluations Performance Evaluations of RD&E Projects 167,765

Sub–total for Priority 2 12,786,155

134 Approved funding Project number Title 2018–19 $ Priority 1 & 2

Strategy 10: Extension and adoption

10.1 Extension and adoption

AGW 1607 ASVO Sponsorship 25,000

AWR 1701-2.1.1 The staging and conduct of extension programs 367,822

AWR 1701-2.1.2 Capital Funds 325,481

AWR 1701-2.2.1 AWRI Helpdesk 723,723

AWR 1701-2.2.2 Library Services 157,830

AWR 1701-2.2.3 Regional Program 57,740

AWR 1701-5.1.1 Efficient Administration 1,923,397

AWR 1701-5.1.2 Information and knowledge management 35,858

AWR 1701-5.2.2 Research Services 548,064

FHC 1901 Proposal to conduct strategic review of extension and adoption in the 27,686 wine sector

CRRDC Council of Rural R&D Corporations – CRRDC 53,839

GRP 1701 Regional Plan – Riverina 2017–22 125,000

GRP 1702 Regional Plan – Greater Victoria 2017–22 50,000

GRP 1703 Regional Plan – Tasmania 2017–22 17,833

GRP 1704 Regional Plan – SA North 2017–22 48,515

GRP 1705 Regional Plan – Murray Valley 2017–22 57,970

GRP 1706 Regional Plan – Limestone Coast 2017–22 44,730

GRP 1707 Regional Plan – SA Central 2017–22 50,000

GRP 1708 Regional Plan – Greater NSW & ACT 2017–22 49,610

GRP 1709 Regional Plan – Western Australia 2017–22 50,000

GRP 1710 Regional Plan – Queensland 2017–22 25,000

GRP 1711 Regional Plan – Riverland 2017–22 62,450

RDC IN Innovators’ Network 49,195

RDC PMS Project Management System 115,003

RDC RP Regional Plan General 42,267

WA 1802 Update the Rootstock Selector Tool: a web based application that is used 4,476 by the Australia grape and wine sector to identify appropriate grapevine rootstocks

WA 1803 Review and evaluate the outputs of Project UA 1301 (Developing a 1,300 fundamental understanding of the microbiological treatment of winery wastewater) for potential inclusion of key information in Wine Australia branded format.

WA 1804 Murray Valley Winegrowers strategic planning session 5,000

135 Approved funding Project number Title 2018–19 $ WA 1806 Closures Factsheet 4,500

WA 1809 Rootstock Selector tool – Phase 2 8,360

WA 1811 Best Practice Management Guide (the BPMG) 5,000

WA 1901 WineOz Smart Grape App 7,555

WA 1903 Workshop at Australian Wine Industry Technical Conference, July 2019 12,000

WAC 1901 Grapevine Pinot Gris Virus Information Extension Program 7,075

WAC 1902 Agthentic Proposal for Identification and prioritisation of Ag+Food 18,182 technology for installation to determine which existing technologies can create the greatest value for Australian grape and wine producers

WAC 1904 Stage 1 in developing the CSIRO component of the Variety Selector Tool 2,599

WAC 1905 Adoption survey and case studies 2019 5,000

Sub–total for Priority 1 & 2 5,115,060

GRAND TOTAL 23,113,563

136 137 Appendix II: Provider and management codes

Code 2XE 2XE

AGW Australian Grape and Wine Authority*

Alumni Support Alumni support for Future Leaders, travel bursaries

AWR Australian Wine Research Institute

CRD Cotton Research and Development Corporation

CRRDC Council of Rural R&D Corporations

CSA CSIRO Agriculture and Food

CSL CSIRO Land and Water

CSP CSIRO Plant Industries

CSU Charles Sturt University

CUT Curtin University of Technology

DED Department of Economic Development, Jobs, Transport and Resources

DPI Department of Primary Industries New South Wales

DPR Department of Economic Development Jobs Transport and Resources Victoria

Evaluations Performance evaluations of R&D Projects

FU Flinders University

F2F Farmers to Founders

FHC Forest Hill Consultants

GI and Vintage Wine Australia GI and Vintage survey

GRP GWRDC Regional Program

LTU La Trobe University

Market Research Wine Australia

NWG National Wine and Grape Industry Centre

PHA Plant Health Australia

RDC Regional Plan General

SAR South Australian Research and Development Institute

UA The University of Adelaide

UM University of Melbourne

UQ University of Queensland

USA The University of South Australia

138 Code UT University of Tasmania

Vinsites Vinsites (imaging of vineyards)

WA Wine Australia

WAT Wine Australia Travel

WFA Winemakers’ Federation of Australia

WOP Wine Opinions

* Australian Grape and Wine Authority, the name of the agency prior to its formal name change to Wine Australia in November 2018

139 Appendix III: Glossary

Term Description 3D three dimensional

Agtech Agricultural technology

Agvet Agricultural and veterinary chemicals

AG&W Australian Grape and Wine (the peak agripolitical organisation for the Australian grape and wine sector

APEC Asia–Pacific Economic Cooperation

AV Australian Vignerons – grapegrower organisation merged with WFA in February 2019 to create AG&W

AWITC Australian Wine Industry Technical Conference

AWRI Australian Wine Research Institute

Brexit Popular contraction of Britain’s Exit from the European Union

CRISPR-CAS9 gene editing technology

CRRDC Council of Rural Research and Development

DFAT Department of Foreign Affairs and Trade

EMEA Europe, Middle East and Africa

FIVS Federation International du Vin et Spirit – international alcohol producers forum

FTAs free trade agreements

FT-NIR Fourier transform near-infrared

FSANZ Australia New Zealand Food Standards Code

GC/MS gas chromatography/mass spectrometry

GI Geographical Indications, place names associated with specific, geographically-defined and regulated grapegrowing regions

GI Committee Geographical Indications Committee

GIS geographic information system generally designed to capture, store, manipulate, analyse, manage, and present spatial or geographic data

In-vitro a process performed in a test tube or culture dish usually referring to tests carried out in a laboratory rather than in the field or within a living organism

LiDAR light detection and ranging

NAA 1-Naphthaleneacetic acid (NAA) is a synthetic plant growth regulator in the auxin family and is an ingredient in many commercial plant rooting horticultural products

Non-GM not Genetically Modified – usually in the context of traditional breeding or selection methods

MLA Meat & Livestock Australia

MRL Maximum residue limits

140 Term Description Ochratoxin A Ochratoxin A (OA) is a toxin produced by certain fungi belonging to the genera Aspergillus and Penicillium. The EC has modified existing regulations, setting a limit of 2 µg/L in wine

OIV International Organisation of Wine and Vine

PACE Pesticide adjusted for the canopy environment

RD&E research, development and extension

R&D research and development

SPHD The Subcommittee on Plant Health Diagnostics of the National Plant Biosecurity Diagnostic Network [of Australia] the Act Wine Australia Act 2013

TWE Treasury Wine Estates

Vis-NIR Visible and near infrared spectroscopic techniques have shown promise as rapid and non- destructive tools to evaluate the various internal quality attributes of fruits and vegetables.

WFA Winemakers’ Federation of Australia, winemaker organisation merged with AV in February 2019 to create AG&W

Xylella fastidiosa The Latin name for the bacteria associated with Pierce’s Disease. The exotic to Australia pathogen, transmitted by insects, is associated with economically devastating effects in grapevines – the bacteria also causes severe economic losses in citrus, stonefruit and olives.

141 Appendix IV: Compliance index

The Annual Report must be prepared by the Directors of Wine Australia in accordance with section 38 of the Wine Australia Act 2013, section 46 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), the PGPA Rule 2014 and the Funding Agreement 2015–2019.

Details Page no. Wine Australia Funding Agreement 2015-19 Contribution to the implementation of relevant Industry sector and cross-sectoral strategies 6, 12–13, 22–29, under the RD&E Framework 46, 64

The rationale for the mix of projects included in the Balanced Portfolio 18–20

Report on research extension activities 64

Collaboration with industry and other research providers 12–13,16, 46–64

Identify sources of income including separate identification of the Levy, the Charge, 17,90 Financial Commonwealth Matching Payments and other form of income including Voluntary Contributions Statements

Full cost of R&D and other activities with costs being allocated in accordance with the Cost 17, 30 Allocation Policy

Progress in implementing strategic plan including progress against the plan’s KPIs 22

Bring the KPIs for each program in the strategic plan and AOP together and demonstrate how 40–67 the deliverables funded advanced the outcomes

Assessment of the efficiency and effectiveness of investments 22–29

Progress in implementing the Guidelines1 31–33

Consultation with the ROs on plans and activities 8,16

Other relevant matters notified to Wine Australia by the Commonwealth by 30 June n/a Wine Australia Act 2013 Particulars of a Minister’s direction and any impact of the direction on the operations of n/a the Authority

A report on the operations of the Geographical Indications Committee and set out all final 81 determinations and translations of such indications made by the Committee

Grape or wine R&D activities coordinated or funded, wholly or partly during the period App I

The amount spent in relation to each of those activities App I

Which of those activities related to ecologically sustainable development (if any) 50–53

The impact of those activities on the grape industry and wine industry 50–53

Agreements entered into under section 10A and/or 10B and the activities during the period in App I relation to agreements entered into under that section

The making of grants under section 10C n/a

1. ‘Guidelines’ for the 2018-19 Annual Report are the Rural RD&E Priorities, the Science and Research Priorities and the Levy Principles and Guidelines in relation to the introduction of new levies or changes to existing levies (if applicable).

142 Details Page no. Activities in relation to applying for patents for inventions, commercially exploiting patented n/a inventions and granting licences under patented inventions

Activities of any companies which Wine Australia has an interest n/a

Any activities relating to the formation of a company n/a

Significant acquisitions and dispositions of real property (land and buildings) n/a

Assessment of the extent to which Wine Australia’s operations during the period have 40–67 • achieved the Authority’s objectives as stated in its strategic plan • implemented the AOP applicable to the period

Assessment of the extent to which Wine Australia has contributed to the attainment of the Entire report objects of the Wine Australia Act

Information from its Geographical Indications Committee on its operations 81 Public Governance, Performance and Accountability Act 2013 Include a copy of the annual performance statements 90

Include a copy of the annual financial statements and the Auditor General’s report 90 Financial Statements

The annual report must comply with any requirements prescribed by the rules 90–124 Public Governance, Performance and Accountability Rule 2014 Report must be approved and signed by accountable authority and include details of how and 90–93 when approval was given and state that accountable authority is responsible for the preparation and contents of the Annual Report (as required in section 46 of the PGPA Act and in accordance with the Finance Minister’s Orders)

Report must comply with the guidelines for presenting documents to the Parliament. Entire report

Report must be constructed having regard to the interests of the Parliament and other users. Entire report Information included in the report must be relevant, reliable, concise, understandable and balanced

Report must specify the enabling legislation and include a summary of its objects and functions 16, 70, 85–86 and the purpose of the entity (from R&D Plan)

Report must specify the name and title(s) of the responsible Minister(s) during the period 86

Report must provide details of: n/a • Directions issued under legislation by the responsible Minister, or other Minister • General policy orders (GPO) that apply to the RDC under s22 (PGPA Act)

143 Details Page no. Report must provide particulars of any non compliance of a direction or GPO n/a

Include a copy of relevant years annual performance statement (PGPA Act s39(1)(b) and 18 section 16F of PGPA Rule 2014)

Include a statement of any significant issue, and remedy action taken, reported to the n/a responsible Minister under s 19(1)(e) of the PGPA Act that relates to non compliance with the finance law in relation to the entity.

Must include information about the directors including names, qualifications, experience, 70–83 attendance of board meetings, and whether the director is an executive or non-executive director

Must provide an outline of the organisational structure, including subsidiaries, location of major 70, 78 activities and facilities and information on the main corporate governance practices.

Must include information on the main corporate governance practices 70, 78

Disclose the decision-making process undertaken by the board for related entity transactions 78

Highlight significant activities and changes that affected the operations or structure during the 2–15, 22–24, financial year 34–36,86

Include particulars of judicial decisions and, decisions of administrative tribunals 86

Include particulars of any report on the entity by the Auditor-General (other than audit of n/a financial statements – s43 PGPA Act), Parliamentary Committee, Commonwealth Ombudsman or Office of the Australian Information Officer.

Unable to obtain information from a subsidiary n/a

Must include details of any indemnity given to the accountable authority, any member of 86 accountable authority or officer against a liability, including premiums paid, or agreed to be paid, for insurance against the authority, member or officer’s liability for legal costs

Must provide an index identifying where the requirements of s17BE are to be found. App IV

144 Appendix V: Alphabetical index

Term Page no. A Allan, Michele 71, 79–82, 117

annual analytical survey 21, 45

Annual Operating Plan (AOP) 18, App IV

Annual report 1, 18, 91, 99, 116, App IV

Assistant Minister of Agriculture and Water Resources 86

audit 4, 14, 31, 67, 71–72, 79, 81, 86, 92–93, 118, App IV

Audit Committee 71–72, 79, 81

Austrade 16, 41–42, 65

Australian Government 1, 6, 8, 14, 16–18, 31–32, 34, 40, 65, 73, 87, 94, 97, 101, 104, 107, 115, 118, 121–123

Australian Grape and Wine Authority (AGWA) 74, 85, App II

Australian Grape and Wine Authority Act 2013 85

Australian Grape and Wine Incorporated (AG&W) 16, 18

Australian Vignerons (AV) – previously Wine Grape Growers Australia 8, 16, App III

Australian Wine Research Institute (AWRI) 5, 16, 18, 26–29, 49, 53, 58–60, 64, 73–74, 101, App I, II & III

B

Board / Directors 8, 15, 18, 30, 70–78, 81–82, 90–93, 109, 117, App IV

committees 79

meetings 78, 81

Brown, Eliza 75, 79, 81, 83, 117–118

C

climate change 13, 25, 29, 50, 52, App I

Comcover 87, 100, 102

compliance 5, 16, 28, 31, 45, 67, 79, App IV

consumer 6, 14, 28, 35, 36, 40, 41, 42, 44, 46, 47, 51, 56, 75, App I

Cooper, Catherine 72, 79–82, 117

145 Term Page no. corporate governance 70, App IV

Council of Rural Research and Development Corporation 26

Commonwealth Scientific and Industrial Research Organisation (CSIRO) 16, 29, 47, 53, 71, 73, App I & II

Croser AO, Brian 9, 72, 79–82, 117

D

Dearie, David 76, 79, 81, 83, 117

Department of Agriculture 15, 18, 70, 101, 104

Directors (see Board) 70

E

ecologically sustainable development 87, App IV

enabling legislation 70, 85, App IV

expenditure 30, 34, 94, 97, 101, 104, 123–124

Export and Regional Wine Support Package ($50m Package) 1, 3, 6–7, 14–15, 17, 30–31, 34–36, 65, 82, 84, 124, 106,

extension 8, 12, 16, 18, 20–21, 30, 32–33, 52–53, 58–59, 64, 74, 80, App I, III & IV

F

financial overview 17

financial statements 17, 86, 90, 92–93, 98–99, 115, 118, App IV

freedom of information 87

free trade agreements 3, 41, 61, App III

Future Leaders 10, 18, 61–62, 74, App I & II

G

geographical indication (GI) 13, 30, 44, 49, 81, App I, II & IV

grapegrowers 13, 16, 52, 64

grape research levy 64

H

Høj, Peter 73, 80–82, 117

I

income 17, 92, 94, 96–98, 100–101, 105–106, 113, 119, 123–124, App IV

Incubator Initiative App I

indemnities 87

Information Publication Scheme 87

insurance 87, 100, 102, App IV

J

judicial decisions 86, App IV

146 Term Page no. K

KPIs (key performance indicators) 8, 31, 44, 66, App IV

L leadership 9, 61–62, 67, 74, 76 levy, levies 9, 15, 17–18, 30, 61, 63–65, 80, 94, 101, 104–105, 123–124, App IV

M markets 3, 7, 14–16, 22, 31, 34, 42, 47, 49, 53, 60–63, 76, 122 market access 21, 30, 32–33, 60–61, App I

Marketing Committee 75, 79, 81

Minister for Agriculture 1, 70

Minister for Agriculture and Water Resources 70, 92 ministerial directions 86

N

National Wine and Grape Industry Centre (NWGIC) 16, App II

O

Oates, Catherine 79, 81–82, 117 organisational structure 72, App III

P partners 16, 29, 36, 41–43, 61, 64–65, 123

Peter, Edouard 76, 79, 83, 117 people

developing 61, 66, 67

management 82

performance management 67

performance review (Directors) 78

staff 66, 67, 84

work health and safety 70, 84

PhD 5, 61, 62 planning

annual operational plan (AOP) 1, 16, 31

strategic plan 1, 6, 8, 15, 16, 18, 22–29

Priorities

Priority 1: Increasing demand 21, 22, 30, 32, 33, 40, 128

Priority 2: Increasing competitiveness 21, 25, 30, 32, 50, 129

147 Term Page no. projects 5, 13, 19–20, 25–30, 31, 35, 46–64, App I

privacy policy 87

Public Governance, Performance and Accountability Act (PGPA Act) 1, 18, 70, 78, 79, 89, 90, 91

R

RD&E Committee 73, 80, 81

RD&E investment

projects 5, 13, 19–20, 25–30, 31, 35, 46–64, App I

providers App II

Remuneration Committee 72, 80

representative organisations 16, 18, 85

Retallack, Mary 74, 79

risk management 67, 70, 79

Research and Development Corporations (RDCs) 8, 13, 14, 16, 26

Rural Research and Development Priorities 29

S

scholarships (PhD, Masters and Honours) 5, 61, 62

travel support 62

Science and Research Priorities 32

South Australian Research and Development Institute (SARDI) 53

stakeholders 4, 15, 16, 18, 63, 65, 67

strategic plan 1, 6, 8, 15, 16, 18, 22–29,

sustainability 6, 18, 21, 30, 32, 33, 50, 51, 52, 53–54, 129

T

Taylor, Mitchell 75, 79, 81, 82

terroir 44, 46, 48

Todd, Keith 77, 79, 81, 83

Tourism Australia 16

travel support 62

W

Walsh, Brian 1, 6, 71, 79, 80, 81, 82, 90

work health and safety 70, 84

Williams AM, Kim 77, 79, 80

Wine Export Charge (WEC) 17, 47, 104

Wine Grape Levy 17

Winemakers’ Federation of Australia (WFA) 8, 16, 18, 78

World Wine Trade Group 60

148 Corporate directory

Head office

National Wine Centre – Industry House Corner Hackney and Botanic Roads Adelaide SA 5000 Australia

PO Box 2733, Kent Town SA 5071 t 08 8228 2000 e [email protected] w www.wineaustralia.com

Asia Pacific Europe, Middle East and Africa

Stuart Barclay Laura Jewell MW General Manager, Marketing Regional General Manager, EMEA Level 9 Australia Centre, Strand 50 Pitt Street London WC2B 4LG Sydney NSW 2000 United Kingdom Australia t +44 207 438 4668 t 08 8228 2000 e [email protected] e [email protected] [email protected]

North Asia Americas

Stuart Barclay (acting) Aaron Ridgway Regional General Manager, North Asia Regional General Manager, Americas Suite 2410 CITIC Building Suite 300 1168 West Nanjing Road 163 2nd Street Shanghai 200041 San Francisco CA 94105 People’s Republic of China United States t +86 21 624 13890 t +1 415 529 7652 e [email protected] e [email protected] [email protected]

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